CIMA: Binance not authorised to operate crypto-currency exchange

The Cayman Islands Monetary Authority announced that the Binance Group and Binance Holdings Limited are not registered, licensed, regulated or otherwise authorised to operate a crypto-currency exchange from or within the Cayman Islands.

Cayman’s financial services regulator was responding to press reports which stated that Binance was operating the world’s largest crypto-currency exchange by trading volume from the islands.

“Following recent press reports that have referred to Binance, the Binance Group and Binance Holdings Limited as being a crypto-currency company operating an exchange based in the Cayman Islands, the Authority reiterates that Binance, the Binance Group or Binance Holdings Limited are not subject to any regulatory oversight by the Authority,” CIMA said.

CIMA’s statement follows similar pronouncements by the UK and Japanese regulators that Binance was not authorised to operate an exchange from their countries.

Binance’s corporate structure is somewhat opaque with a holding company registered in Cayman and entities dotted around the world, but no official headquarters anywhere.

- Advertisement -

Binance was initially based in China but, anticipating a government crypto-crackdown, moved its business to Japan. As regulations tightened in Japan, the company in 2018 announced it would open an office in Malta and signed a memorandum of understanding with the government of Bermuda.

Last year, the Malta Financial Services Authority (MFSA) declared, in response to media reports describing Binance as being based on the Mediterranean island, that the company is not authorised by that authority to operate in the crypto space and not subject to regulatory oversight by MFSA.

Binance also has a company in Jersey but shuttered the exchange it operated from there at the end of last year.

‘Elaborate corporate structure’

Last year, Binance sued Forbes and two of its journalist for defamation after the business magazine reported, based on a leaked powerpoint presentation, Binance had conceived an elaborate corporate structure to deceive regulators and “surreptitiously profit from crypto investors in the United States”.

Binance was banned in the US in 2019. The company then partnered with BAM Trading Services Inc to open Binance.US, a separate exchange catering to American clients registered with the US Financial Crimes Enforcement Network.

CIMA said it is currently investigating whether Binance, the Binance Group, Binance Holdings Limited or any other company affiliated with this group of companies has any activities operating in or from within the Cayman Islands which may fall within the scope of its regulatory oversight.

Cayman-registered companies that provide virtual-asset and custodian services locally or from the islands must either be registered or licensed under the Virtual Asset (Service Providers) Act, 2020 or have been granted a waiver by the authority.

- Advertisement -

Support local journalism. Subscribe to the all-access pass for the Cayman Compass.

Subscribe now