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The announcement by CIMA came barely a week after Singapore’s oversight authority revealed that it would review a license application made by a Binance affiliate Pte.
CIMA, an oversight authority in the Cayman Islands, clarified that Binance is not permitted to do business within its jurisdiction amid news that the company is actually incorporated there. The statement further stated that the three entities affiliated to Binance i.e Binance Holdings, Binance, and Binance Group have no authority to conduct business within or from overseas territories controlled by Britain. However, business registration data indicates that Binance Holdings is actually incorporated there.
Binance Activities in the Cayman Islands
The statement reveals that the CIMA is currently investigating whether Binance Group and Binance Holdings or any of its affiliates transact from the Cayman Islands, which falls within the scope of the oversight authority. The regulator however refrained from accusing Binance of any wrongdoing.
Responding to that matter, a Binance spokesperson was quoted saying that Binance.com isn’t centralized, and insisted that it’s run in a decentralized manner. He also said that the company doesn’t have any operations in the Caymans Islands. The spokesperson added that the allegations made by some media outlets were outright lies and erroneous.
Binance has however confessed that it has entities incorporated under the Cayman Islands laws and said that it was ready to clarify any questions that authorities might be having. Additionally, the company said that those entities carry out other activities, permitted by law, which is in no way linked to cryptocurrencies.
Conditions for Incorporation
The regulator, CMA, said that all crypto exchanges looking forward to being incorporated in the Cayman Islands must first fulfill some conditions. The first condition is being licensed according to the Virtual Assets or Service Providers act (VASPA), 2000. Failure to that, the cryptocurrency exchange must be a regulated company previously granted a VASPA waiver by CIMA.
According to a reliable source, Virtual Assets Service Providers was to have been registered with CIMA by end of January 2021 and another phase of the enforcement called “licensing and prudential supervision” was supposed to have been done by the end of June 2021.
General Market Trend
The announcement by CIMA came barely a week after Singapore’s oversight authority revealed that it would review a license application made by a Binance affiliate Pte amid worldwide scrutiny of the parent company Binance Holdings.
Last week, a British oversight authority, UK Financial took the lead to bar Binance operations within Britain. This however doesn’t seem to have impacted directly on the services of the cryptocurrency exchange, which shows that regulators control towards Binance is minimal. Also, Binance announced that it was halting its Canada operations in Ontario amid an intensive crackdown. The exchange has even told its Ontario customers to ensure that their active positions are closed by the close of the year.