Binance, one of the largest and most used cryptocurrency exchanges in the world, continues to break the law, this time by operating unauthorized in the territory of Malaysia.
Reciente en un release, the authorities of the Securities Commission (SC) of Malaysia announced that Binance does not have the necessary authorization or licenses to operate within its territory, so they warned the community not to use this platform for violating the law.
The SC issued a long list of the exchanges and exchanges of cryptocurrencies, who are not authorized by the entity to operate within Malaysia; and in the specific case of Binance, he argued that it is operating “a recognized market without authorization from the SC”. For Binance, or any other cryptocurrency exchange, to operate legally within Malaysia, it must comply with the law, which states that any exchange must properly register with the regulatory body, which is the Securities Commission, and wait for its approval once it meets all the required requirements in a maximum period of nine months.
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It is not the first time that Binance breaks the law of a country
Although many users and investors believed that the headquarters of the largest cryptocurrency exchange in the world was located in China, Japan or Malta, the truth is that no one has a concrete idea of where Binance's headquarters are actually located. Beyond that, the authorities of several countries issued statements denying that Binance has a headquarters established within their territories or that it is authorized to do so. In the specific case of Malta, the Financial Services Authority (MFSA) of that country indicated that the exchange is not authorized by the competent entities to carry out its commercial activities related to cryptocurrencies within its territory.
The statement issued by the Malta MFSA states that:
“Following a report in a section of the media referring to Binance as a “Malta-based cryptocurrency” company, the Malta Financial Services Authority (MFSA) reiterates that Binance is not authorized by the MFSA to operate in the cryptocurrency sphere…However, the Authority is assessing whether Binance has any activities in Malta that do not fall within the scope of regulatory oversight.”
Making it very clear that the operations carried out by the exchange within the nation take place illegally and not authorized by the regulatory entity.
What will Binance do about it?
Despite the statement issued by the Malaysian regulatory entity, it does not appear that Binance has any intention of abandoning or suspending its operations within the Asian country. Although to date neither Binance nor its CEO, Changpeng Zhao, have issued a response regarding the exchange's inclusion in Malaysia's blacklist, a customer service operator stated that the cryptocurrency exchange does carry out operations with cryptocurrencies within the Asian country and that it is not illegal, although it does not account with the required licenses.
Charges and penalties the exchange may face
Malaysian law states that if current regulations are not followed, cryptocurrency exchanges that operate illegally and unauthorizedly may face fines and other types of penalties. In fact, the authority issued another release at the beginning of the month in which it warned the community not to operate cryptocurrency ATMs within the territory, or they could be subject to fines of up to 10 million ringgit (Malaysia's official currency), equivalent to 2,3 million dollars, or even face several years in prison.
According to the SC, the measures implemented are intended to protect users and investors from possible cases of fraud and other risks involved in an unregulated market. The SC also argues that by operating within a regulated exchange that is governed by the country's regulations, users can be protected from the different possible risks and will have someone to turn to if a problem arises, otherwise if they operate in a market not authorized by the regulatory entity.
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