• December 14, 2021

Binance Singapore affiliate says will withdraw licence bid and shut down its local platform.

HONG KONG - Binance, one of the world's largest cryptocurrency exchanges, announced on Monday that it will withdraw its local licence application and shut its digital payment token business in the crypto-friendly city-state.

The company did not specify a justification for its decision other than "strategic, commercial, and developmental" factors, and stated that it will refocus the local unit's efforts on becoming a blockchain innovation centre.

This year, governments and financial regulators around the world have increased their scrutiny of the cryptocurrency industry, posing a challenge to exchanges that have thrived in a largely uncontrolled environment.

Due to a very clear legislative and operational environment, Singapore is a favoured location for cryptocurrency companies, and it is one of the world's forerunners in building a formal licencing structure.

Binance's Singapore operation was one of more than 100 cryptocurrency companies that applied for a licence to operate in Singapore, and it was allowed to continue operating while its application was being considered.

This year, Singapore issued its first licences, including one to a unit of Southeast Asia's largest bank, DBS, but hundreds more have been withdrawn or refused.

Binance's Singapore platform for trading fiat and cryptocurrencies will shut down by the middle of February, according to the company. Users in Singapore would not be able to trade on the business's global platform due to local regulations, the company announced in September.

Binance Asia Services had provided the Monetary Authority of Singapore with a plan for the orderly termination of its regulated payment services, according to a spokesperson, which "will allow sufficient time for customers to seek alternative providers, or, if they wish, to liquidate their holdings."

"I believe this (Binance's withdrawal of its application) demonstrates that Singapore's licencing framework is extremely strict," said Chia Hock Lai, co-chairman of the Blockchain Association Singapore.

"Having said that, Binance has declared that Singapore will continue to be their blockchain innovation hub, so the narrative that Singapore is a major blockchain hub remains intact."

Consumer protection and anti-money laundering measures have been raised by financial regulators in Hong Kong, the United Kingdom, Germany, and Japan, among others. Some have prohibited the platform from engaging in specific operations, while others have alerted consumers that it was unlicensed to operate.