Binance, the leading cryptocurrency exchange by trade volume, continues facing scrutiny from regulators regarding the legality of its operations in certain countries.
Thailand’s Securities and Exchange Commission (SEC) and the Cayman Islands Monetary Authority (CIMA) are the latest financial regulators to announce a regulatory crackdown on Binance.
Thai SEC announced Friday that the agency had filed a criminal complaint against Binance, launching a criminal procedure and an investigation for allegedly operating a digital asset business without a license. The authority said that Binance had provided crypto trading services via its website by “matching orders or arranging for the counterparties or providing the system or facilitating entry into an agreement.”
“In so doing, Binance has solicited the Thai public and investors to use its services, either via its website or Facebook Page: Binance Thai Community,” the SEC noted. The regulator mentioned that it previously issued a warning letter to Binance in April, requiring the exchange to submit a written response but the crypto exchange failed to submit a response within the specified time.
“Only providers who have obtained relevant licenses under the law are allowed to provide services related to digital asset trading, exchange, depository, transfer, withdrawal or any transactions related to digital assets. Violators may be liable to penalties under the law,” the agency noted.
Thai SEC’s announcement comes just a day after Cayman’s CIMA officially announced Thursday that entities like Binance, the Binance Group and Binance Holdings are “not registered, licensed, regulated or otherwise authorized” to operate a crypto exchange “from or within the Cayman Islands.” The regulator emphasized that none of the listed entities are subject to any of its regulatory oversight.
CIMA noted that the regulator will be also investigating any other company affiliated with Binance having any activities operating in or from the Cayman Islands.
The authority added that any crypto-related company incorporated under the Cayman Islands Companies Act, 2020 or otherwise established in the Cayman Islands must either be registered by the country’s virtual asset service providers act or any existing regulated entity that the authority has granted a waiver under the act.
A spokesperson for Binance told Cointelegraph that the crypto exchange has “always operated in a decentralized manner.” The representative has denied reports regarding Binance’s crypto operations in the Cayman Islands, adding:
“We do, however, have entities incorporated under the laws of the Cayman Islands performing activities that are permitted by law and not related to operating crypto-exchange trading activities.”
Related: Binance tackles Travel Rule compliance after multiple bans
As a major global exchange, Binance has been struggling to find the right jurisdiction for operating its cryptocurrency business. Founded in China before the state enforced a ban on crypto trading in 2017, Binance moved overseas and was reportedly headquartered in the Cayman Islands and Seychelles as of February 2020.
Binance is known for having multiple entities around the world and was reportedly previously headquartered in Malta. Last February, the Malta Financial Services Authority claimed that it never approved Binance to operate in the country.
The latest news comes amid a renewed crackdown on Binance’s activity around the world, with governments like the United Kingdom, Japan, Canada, and the United States closely following the exchange’s operations recently. According to a Thursday Bloomberg report, the Singapore Monetary Authority plans to review Binance Asia Services’ license application amid its parent company coming under regulatory scrutiny worldwide.
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