“Regulatory Compliance Is A Must, Not A Decision,” says Binance CEO As Malaysia, India, And Europe Strike Yet Again

Malaysia’s SC has taken enforcement action against Binance, giving it 14 days to completely close its business while India’s AML agency is investigating the exchange’s role in betting apps. In Europe, Binance is winding down its futures and derivatives products offerings, starting with Germany, Italy, and the Netherlands.

Another day and another round of regulatory onslaught. Leading cryptocurrency exchange Binance can’t seem to take a break as a string of global regulators sends their warnings.

But CEO Changpeng Zhao is maintaining his composure as he works towards compliance, saying, “Sometimes, small setbacks are necessary for bigger long-term growth. Keep on building.”

“Regulatory compliance is a must, not a decision. And it leads to MORE market access and adoption, not less. Crypto adoption is probably around 2% now. Let's go get the other 98% onboard,” tweeted CZ on Friday in response to this latest barrage of regulatory scrutiny.

Malaysia Takes Enforcement Action

To start with, Malaysia’s SC announced today that it is taking enforcement actions against Binance for illegally operating a Digital Asset Exchange (DAX) in the country. It reads,

“Under Sections 7(1) and 34(1) of the Capital Markets and Services Act 2007, all DAX operators must be registered as Recognized Market Operators (RMO) by the SC.”

Binance was first included in the regulators’ Investor Alert List in July 2020. Then a public reprimand was issued against Cayman Island registered Binance Holdings Ltc., its CEO CZ, and three other Binance entities registered in the UK, Lithuania, and Singapore for operating illegally.

Now, Binance Holdings, Binance Digital Limited, Binance UAB, and Binance Asia Services Pte Ltd, are ordered by the SC to disable their website and mobile applications within 14 business days of 26 July 2021 and cease all media and marketing activities. The SC said,

“Investors are advised to stop dealing with and investing through illegal DAX. Those who currently have accounts with Binance are strongly urged to cease trading through its platforms immediately and to withdraw all their investments immediately.”

Winding Down Derivatives Trading in Europe

Meanwhile, in Europe, Binance is shutting down derivatives and futures products offering across the Europe region, starting with Germany, Italy, and the Netherlands. The exchange said,

“With immediate effect, users from these countries will not be able to open new futures or derivatives products accounts. With effect from a later date to be announced in a further notice, users from these countries will have 90 days to close their open positions.”

The UK’s Financial Conduct Authority (FCA) has already cracked down on the exchange, with several banks restricting their services to the platform. Regulators in Germany have also previously raised concerns about Binance selling tokenized stocks.

Binance yielding to regulatory pressure started earlier this week when the exchange announced KYC compliance and reduced its daily withdrawal limit to 0.06 BTC for non-verified users.

India Investigating its Role in Betting Apps

As for India, the country’s anti-money laundering agency is examining if Binance Holdings had a role to play in an online investigation involving betting apps, reported Bloomberg citing people with knowledge of the matter.

The Enforcement Directorate reportedly summons Binance executives for questioning.

India has already been probing betting apps run by Chinese operators for allegedly laundering money through the cryptocurrency exchange WazirX, acquired by Binance in 2019. These betting apps collected more than 10 billion rupees ($134 million) over the past ten months.

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