Binance is seeking a license to offer cryptocurrency services in Singapore once more, focusing on institutional clients rather than retail investors.
According to reports, the world’s largest crypto exchange is planning for its custodial arm, Ceffu, to apply for a permit to provide custodial and other digital asset services to professional investors. The spinoff was launched in November 2021 and catered to clients seeking custodial and digital asset services.
Following pressure from the local financial regulator, Binance closed its Singapore platform to retail investors in 2020.
The company has since been offering services to institutional clients in the city-state. Singapore is known for its reputation for innovation, good corporate governance, and strong regulatory framework, making it an attractive location for institutional investors.
The Monetary Authority of Singapore (MAS) published proposals in October 2022 to broaden its authority in order to better protect consumers’ interests in the cryptocurrency sector. Observers anticipate it will be months before any new rules in Singapore’s consumer-centric crypto regulatory framework are implemented.
The framework prohibits firms from lending out digital coins owned by retail customers and mandates that client assets be kept separate from firm holdings. The regulator has also proposed a ban on the use of credit lines to purchase cryptocurrencies, and digital asset firms may be required to administer assessments for retail investors prior to trading virtual tokens.
Binance provided the MAS with feedback on the regulator’s proposals for enhanced consumer protection, recommending a few changes. On the idea of disallowing players from lending out digital coins owned by retail customers, Binance proposed a calibrated approach to protect clients from the risks of unregulated leverage.
Binance’s drive to secure license despite regulatory scrutiny
The increased scrutiny has raised concerns about Singapore’s ability to remain an appealing location for digital assets at a time when other hubs like as Hong Kong are attracting investment.
Regardless of the challenges, Binance appears to value even a limited commercial presence in the Southeast Asian country through its institutional business, as made evident by Ceffu’s determination to obtain a license in a more stringent regulatory environment.
The move comes at a time when Binance is facing increasing scrutiny from regulators worldwide, including the United States, where its local entity, Binance.US, is facing opposition from watchdogs over a proposal to acquire the assets of bankrupt crypto lender Voyager Digital.