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MAS orders crypto exchange operator Binance to stop providing payment services to Singapore residents

MAS orders crypto exchange operator Binance to stop providing payment services to Singapore residents

The Binance app is seen on a smartphone. (Image: REUTERS/Dado Ruvic)

SINGAPORE: The Monetary Authority of Singapore (MAS) on Thursday (Sep 2) said it has ordered the operator of cryptocurrency exchange platform Binance.com to stop providing payment services to residents in Singapore.

Responding to media queries, an MAS spokesperson said that Binance, the operator of Binance.com, may be in breach of the Payment Services Act for providing payment services without an appropriate licence.

Binance did not apply for a licence under the Payment Services Act, the spokesperson said.

The regulator has placed Binance.com on its investor alert list, warning consumers that Binance is not regulated or licensed to provide any payment services in Singapore.

"Binance is required to cease providing payment services which are regulated under the Payment Services Act to Singapore residents and cease soliciting such business from Singapore residents," said the spokesperson.

MAS added that Binance Asia Services – a separate entity that operates another cryptocurrency exchange platform Binance.sg – has submitted a licence application under the Payment Services Act.

Binance Asia Services is currently exempted from holding a licence for provision of digital payment token services under the transitional arrangements in the Act, the spokesperson said.

MAS had earlier said that this exemption applies to entities that were carrying on regulated business before the start of the Payment Services Act on Jan 28, 2020.

The exemption allows an entity to continue providing its services while its licence application is being processed, and lasts until the licence application is approved, rejected or withdrawn.

MAS said that it has been engaging Binance Asia Services and expects it to "immediately begin an orderly suspension of its facilitation of transfers of digital payment token assets" with Binance.

It added that Binance Asia Services will inform its customers of the appropriate arrangements as soon as practicable.

Binance Asia Services' licence application remains under review, subject to it demonstrating that it is able to meet requirements under the Payment Services Act, said the MAS spokesperson.

The Payment Services Act regulates seven key payment services: Account issuance, domestic money transfer, cross-border money transfer, merchant acquisition, e-money issuance, digital payment token service and money-changing.

Digital payment token service includes the buying or selling of digital payment tokens, or providing a platform to allow people to exchange such tokens in Singapore, according to MAS.

BINANCE.COM WORKING WITH MAS TO ADDRESS CONCERNS

In response to CNA's queries, Binance.com said it was aware of the notice from MAS and that it was working with the authority to "address concerns that they may have through constructive dialogue".

"Binance.com takes a collaborative approach in working with regulators in navigating this emerging industry and we take our compliance obligations very seriously," it said in a statement.

"We are actively keeping abreast of changing policies, rules and laws in this new space. We will work closely with MAS and other global regulators to comply with the relevant regulatory standards."

In a separate statement, Binance Singapore said that MAS' notice "has no direct impact on the services" provided on Binance.sg.

"Our relationship with our users has not changed," Binance Singapore said, adding that it is a separate legal entity from Binance.com with its own local executive and management team.

Binance Singapore also said it does not offer any products or services via the Binance.com website or other related entities, and vice versa.

"Binance Singapore is solely focused on growing the Singapore cryptocurrency ecosystem and servicing users in Singapore," it added.

Binance, founded by Chinese-Canadian entrepreneur Changpeng Zhao, is the largest crypto exchange in the world by volume.

The company has come under pressure from regulators around the world due to concerns over the use of crypto in money laundering and risks to consumers.

Source: CNA/dv

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