Binance among firms stymied by Singapore's money-launder rules
The Monetary Authority of Singapore allows applicants to withdraw rather
than face an outright regulatory rejection, the person said, asking not to be
identified because the deliberations are confidential.
No reason was given when Binance Asia, an affiliate of the world's largest
cryptocurrency exchange, said on Dec 13 it was pulling the application.
MAS managing director Ravi Menon said in October that it would apply
"very high standards" in issuing the coveted crypto licences.
Of the roughly 100 firms that have dropped out of the running so far, most
did so after failing to meet Singapore's strict criteria on countering
potential illicit flows, according to the person.
In all, some 170 companies applied last year for crypto permits in the Asian
financial hub after legislation regulating the payments industry became
effective in January 2020.
Binance spokesperson Hazel Watts, in response to a request for comment, said
the exchange's decision to withdraw its licence application was made "for
strategic and commercial objectives only. Binance recently made a sizable
investment into the regulated exchange HGX, which rendered our application for
Binance Asia Services redundant."
Binance Asia Services has taken a robust approach to security, including
risk-sensitive application of measures to combat money-laundering and terrorism
financing, as well as mandatory "know-your-customer" protocols and
continued collaboration with the Singapore Police Force's Anti-Scan Centre to
combat ransomware, hacks and scams, Watts added.
Binance Asia took into account "strategic, commercial and developmental
considerations globally" in its decision to withdraw the Singapore
application, the company said when announcing the move. It will wind down
operations at the fiat-to-cryptocurrency trading platform Binance.sg by Feb 13.
The central bank looks at applicants' understanding of risks related to
money laundering and terrorism financing when deciding on approvals, MAS
Chairman Tharman Shanmugaratnam said in a reply to Parliament in July. It also
considers "technology risks posed by their business model, as well as the
adequacy of controls instituted to mitigate such risks," he said at the
time.
"MAS' approach to regulation under the Payment Services Act seeks to
facilitate innovation while ensuring that adequate controls are in place to
address key risks such as money laundering and terrorism financing," a MAS
spokesperson said in response to questions from Bloomberg, without addressing
Binance Asia's application.
"Applicants are able to withdraw their applications should they see
fit, upon which those who are operating under exemption will be required to
cease providing regulated payment services," the MAS spokesperson said.
Less than 70 companies are still waiting for regulatory approval to
officially operate cryptocurrency-related services in Singapore. Four firms are
known to be approved so far, including DBS Group Holdings' brokerage unit and
Independent Reserve.
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