The Singapore government granted exemption period expires today. With immediate effect, Binance, Bixin, Coinbase and other companies will lose their legal positions operating cryptocurrency trading businesses without obtaining the payment service license.
The Monetary Authority of Singapore (MAS) promulgated the Payment Services Act (Specified Period Exemption) in 2019; and on March 24 2020, issued a list of firms can get exemption. Crypto firms providing digital payment token service got 6-months-length legal identity, which includes Binance Asia Services Pte Ltd, Bixin Pte Ltd, Coinbase Pte Ltd, Ripple Research Singapore Pte Ltd, and others crypto enterprises.
It is also declared that, those entities in the list haven’t obtained the service license as required by the Payment Services Act.
The list states that, the last exemption date for the above entities to conduct business in Singapore is 28 July 2020. After that, enterprises such as Binance that seek to continue to conduct crypto business in Singapore, will need to submit an application to obtain a license before they can continue to conduct business.
It is noteworthy that the MAS has recently noticed that a large number of digital currency related enterprises have registered their companies in Singapore, but do not provide trading services to Singapore residents in order to circumvent Singapore’s regulations. In response, the MAS issued a proposal on July 21 calling for restrict actions to address potential financial risks. This proposal, if passed into law, would give the MAS the power to regulate digital currency trading businesses registered in Singapore, regardless of whether they are operating in Singapore or not.
Under the dual requirements of Singapore’s Payment Services Act and the new proposal, the offshore option of simply setting up a “head office” in Singapore in order to avoid regulation will no longer be applicable, and the only legal option will be to obtain a license and operate in compliance.
Coin Security, a star enterprise at the forefront of the trading industry, currently operates fiat currency trading services in Singapore, providing a channel for exchanging Singaporean dollars into digital currencies.
On 7th April, Binance released news that it has partnered with Alchemy Pay to promote BUSD, the stablecoin issued by Binance, making BUSD one of the mainstream payment options in Singapore,. However, Alchemy is also on the exemption list announced by the MAS, and will not be able to legally provide payment services in Singapore after July 28.
So far, Binance does not make it clear that where its headquarter locates, but the terms of use published on its website make it clear that, dispute resolution for users should be decided according to the Singapore International Arbitration Centre. It is also reported that ,the two co-founders of Binance, Changpeng Zhao and Yi He, are currently managing this globally distributed organization in Singapore.
In response to this, Binance replied to CJonchain that it has submitted a filing application in accordance with the Payment Service Act of the MAS by payment service business license requirements. The response did not specify that they have obtain relevant license.
The MAS said that, the new Act provides a comprehensive regulatory framework for the digital currency market, as well as a forward-looking and flexible framework. The Payment Services Act adds three new business licenses, including a currency exchange license, a standard payment institution license and a major payment institution license. Binance had submitted applications after the Act was published, but there is no word yet on whether any entity has been granted the license.
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