Binance was founded in 2017 and was originally one of the three largest digital currency exchanges in China. However, due to policy restrictions of the Chinese government, Binance announced its withdrawal from the Chinese market in February 2018 and shifted its business focus to overseas. Binance is being strictly regulated by more and more countries around the world and has been criticized by many countries.
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Binance has been sieged by regulators in many countries, including Thailand, Singapore, Japan, the United Kingdom, and the Cayman Islands. On July 2, the Securities and Exchange Commission of Thailand announced criminal charges against Binance and investigated its suspected unlicensed operation of digital asset business. Singapore's financial regulator said it would follow up on its subsidiary in Singapore after Binance was reviewed by regulators around the world. The Financial Conduct Authority (FCA) of the United Kingdom issued a warning that entities under the Binance Group do not hold any form of authorization, registration or license in the UK, and Binance appears to be providing a range of products and services to British customers. The Cayman Islands Monetary Authority announced that Binance, Binance Group and Binance Holdings Limited are not registered, licensed or regulated there, and reiterated that they are not regulated. The Financial Services Agency of Japan issued a warning to Binance Holdings Limited, saying that it provides crypto services without registration.
Binance's sudden crackdown by regulators in multiple countries has raised questions about whether there is some kind of tacit agreement between countries. Adam Cochran, a partner at crypto investment firm Cinneamhain Ventures, believes that the pursuit or alienation of Binance by global regulators is shocking. Financial regulators do not usually cooperate in law enforcement unless they are hunting down large criminal gangs. Therefore, this coordinated action by regulators in multiple countries is difficult to understand.
Binance is now in trouble, and the reason why it is targeted by regulators in many countries is relatively easy to explain. As one of the world's largest exchanges by trading volume, Binance is frequently used by users in countries such as Thailand, Singapore, Japan, the United Kingdom and the Cayman Islands, so regulation is inevitable for it. However, due to non-compliance, Binance's market value valuation is much smaller than Coinbase, and even worse than Kraken. As domestic supervision becomes more and more stringent, China's virtual currency exchanges have begun to enter the era of overseas operations. However, in those countries that recognize cryptocurrencies, exchanges need to obtain digital asset trading licenses. For small and medium-sized exchanges that hope to grow and develop, they must embark on the path of applying for licenses.
It should be noted that the focus of this overseas supervision is whether crypto companies have the qualifications and licenses to provide cryptocurrency derivatives and securities services and anti-money laundering related businesses in the corresponding regions, and not to regulate cryptocurrency transactions themselves.
