Cayman Islands regulator to investigate scope of Binance activities

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Cayman Islands regulator to investigate scope of Binance activities

The Cayman Islands Monetary Authority (CIMA) yesterday (I July) joined a host of other financial watchdogs around the world with its own statement that, despite media reports of Binance being incorporated in the territory, it was not registered, licenced or regulated there to run a crypto-currency exchange.

"Binance, the Binance Group and Binance Holdings Limited are not registered, licensed, regulated or otherwise authorised by the Authority to operate a crypto-currency exchange from or within the Cayman Islands", the regulator said.

However, CIMA said it was "currently investigating whether Binance, the Binance Group, Binance Holdings Limited or any other company affiliated with this group of companies has any activities operating in or from within the Cayman Islands which may fall within the scope of the Authority's regulatory oversight".

Binance, the Binance Group and Binance Holdings Limited are not registered, licensed, regulated or otherwise authorised by the Authority to operate a crypto-currency exchange from or within the Cayman Islands."

The island regulator added: "Any company incorporated under the Cayman Islands Companies Act, 2020 or otherwise established or registered in the Cayman Islands that provides virtual asset services or custodian services as a business or in the course of business, in or from within the Islands must either be: (i) registered or licensed in accordance with the Virtual Asset (Service Providers) Act, 2020 ("VASPA"); or (ii) an existing regulated entity that has been granted a waiver by the Authority under the VASPA."

Binance's corporate structure remains opaque with news agency Reuters reporting on 1 July that a Binance spokesperson declined to comment on its location, saying it was "decentralised" and that it "works with a number of regulated entities around the world".

Binance also stated that: "We do however, have entities incorporated under the laws of the Cayman Islands performing activities that are permitted by law and not related to operating crypto-exchange trading activities. We will work with regulators to address any questions they may have."

According to the Cayman Island business registration record, Binance Holdings Limited is incorporated as a business entity within the territory.

The CIMA statement came a day after the Monetary Authority of Singapore said it would review the license application again from Binance Asia Services Pte because its parent entity Binance Holdings Ltd came under regulatory scrutiny worldwide, according to a Bloomberg report.

Last week, the FCA issued a statement to bar Binance's UK entity from taking any "regulated" activities.
Last month, Binance said it is exiting the Canadian province of Ontario amid a regulatory crackdown there and all Ontario-based users must close out all active positions by December 31, 2021.

The Japanese Financial Services Agency also issued another warning in June that Binance is still offering services to Japanese residents without having a proper license registered with the financial watchdog.

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