Binance, one of the biggest cryptocurrency exchanges, is facing a potential ban in the Cayman Islands, the jurisdiction under which it is registered. According to a report in the South China Morning Post , the cryptocurrency exchange is accused of failing to comply with the country’s anti-money laundering law.
Binance has become one of the most popular cryptocurrency exchanges in the world overnight, with its low fees and fast trades and withdrawals. The exchange was initially launched in China but moved to Singapore after the government cracked down on cryptocurrency trading in the country. Now the exchange is being pressured by the Cayman Islands government to leave the country due to the company’s lack of a physical presence in the country.
In an effort to reduce money laundering activities, the Cayman Islands Monetary Authority (CIMA) has announced that it will ban cryptocurrency exchanges in the Cayman Islands. CIMA believes that exchanges, which act as custodians for investors’ funds, aren’t meeting the standards of good governance and that banning the exchanges will help to reduce potential money laundering.Summary of the situation
Cayman Islands regulator CIMA says the world’s most widely used cryptocurrency platform, Binance, is under investigation. The decision came after the regulator said Binance was not allowed to trade in its jurisdiction. The ban also applies to companies registered with Binance, such as Binance Group and Binance Holdings.
CIMA is conducting a thorough investigation into Binance and its holdings, the statement said. However, the regulator has limited itself to accusing Binance of illegal actions until conclusive evidence is received. This is not the first time a cryptocurrency platform has come under scrutiny; a few days ago, UK authorities banned it from operating in the region.
Binance defends itself against CIMA
Following the opening of an investigation into Binance’s activities in the Cayman Islands, the platform has spoken out. A spokesperson for Binance.com said the cryptocurrency platform is not centralized and does not operate out of the Cayman Islands. Even a spokesman dared to say that the allegations were blatant and based on lies.
Binance agencies in the Cayman Islands serve other purposes besides cryptocurrencies. CIMA’s investigation into Binance was prompted by recent bans in the UK. However, Binance.com is banned in China and Japan, where cryptocurrency regulations are being tightened.
Cayman Islands Government accepts operation Binance subject to conditions
CIMA, the official regulatory authority of the Cayman Islands, has explained the operation and registration of Binance under its jurisdiction. First, a cryptocurrency platform must have a virtual asset or service provider right. If not, Binance.com must be a regulated entity that has been granted a VASPA exemption by the CIMA.
The platform is reportedly expected to be registered by the end of January 2021. Binance was also expected to pass the licensing and regulatory phase by the end of June.
But the investigation into Binance comes after Singapore announced that it had applied for a license for Binance. All indications are that Binance wants to move its operations from the Cayman Islands to Singapore because it is a tax haven. However, the cryptocurrency platform needs to solve all its problems in the region before withdrawing.
Binance.com is the most widely used platform for buying and selling cryptocurrencies in the United States and parts of the world. This site specializes in crypto asset trading and offers fans the opportunity to get their first tokens. Binance was accused of money laundering and facilitating organized crime.
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