REGULATION

Regulatory Pressure! Binance Ordered to Halt Services in Malaysia, Cease European Derivatives Business, India Branch Accused of Gambling

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Regulatory Pressure! Binance Ordered to Halt Services in Malaysia, Cease European Derivatives Business, India Branch Accused of Gambling

Despite Binance's strong external statement this week about its full commitment to transforming into a compliant financial institution and implementing a series of industry-leading measures, it has not been able to stop the pressure from regulatory authorities around the world. Today, there have been consecutive regulatory-related news regarding Malaysia, Europe, and India for Binance.

Ordered to Cease Operations in Malaysia

The Securities Commission Malaysia (SC) condemned Binance for operating illegally in Malaysia and ordered four Binance entities registered in the Cayman Islands, the United Kingdom, Lithuania, and Singapore to comply with three actions:

  • Disable the Binance website www.binance.com and APP in Malaysia within 14 working days starting from 7/26
  • Stop disseminating marketing information to any Malaysian users
  • Restrict Malaysian investors from accessing Binance Telegram groups

It is claimed that in order to provide services to Malaysian users, entities must obtain the Recognized Market Operators (RMO) registration locally. SC also specifically named CEO Changpeng Zhao as responsible for implementing the above requirements. The country also urged investors to cease trading on illegal platforms and withdraw all assets from Binance.

Binance responded: "We are aware of the notice from SC Malaysia and can confirm that Binance.com does not operate within Malaysia. We will assist regulators from all over the world in finding the best way to cooperate."

Binance Halts European Derivatives Service, Effective Immediately in Germany, Italy, and the Netherlands

Binance announced that it will terminate its contract and derivatives services in Europe. It is reported that Germany, Italy, and the Netherlands will be immediately affected, unable to open new futures positions or other derivative products. Users in these three countries will have a 90-day buffer period to close out their open positions.

Binance stated that this move is to proactively manage itself to cater to potential local regulatory requirements.

https://twitter.com/binance/status/1421033049098174468

Bloomberg Unconfirmed Report: India Investigating WazirX for Money Laundering

An anonymous source cited by Bloomberg claimed that India's anti-money laundering agency is investigating Chinese betting-related applications that handled over 1.34 billion INR worth of transactions in the past 10 months, laundering through WazirX, an exchange acquired by Binance in 2019.

The source revealed that authorities have summoned Binance executives to review if Binance played a role in the transfer of funds. He stated, "These betting apps use WazirX wallets to buy and transfer funds to the Binance platform, and regulators also accused WazirX of violating foreign exchange management regulations in transactions worth 27.9 billion INR."

He added that Binance did not implement KYC policies in most transactions and did not collect information to comply with FATF requirements for anti-money laundering policies. Indian enforcement authorities have not responded yet.

Binance responded, calling it fake news. Binance.com has not been summoned, and the information is public and accessible. Binance has been assisting law enforcement agencies worldwide in combating crime, and its global compliance process is progressing smoothly.

Changpeng Zhao Says: Retreat in Order to Advance

Following the above news, Binance CEO and founder Changpeng Zhao only commented:

"Sometimes, to move forward for long-term growth, it is necessary to take a step back. Keep building!" He recently mentioned that he is looking for talents with a strong regulatory background to succeed him as CEO.