The Malta Financial Services Authority (MFSA), the nation’s financial regulator, released a statement on February 21, claiming that it never actually regulated Binance, the world’s largest crypto-asset exchange in terms of adjusted trading volume.
To quote the MFSA:
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 authorised by the MFSA to operate in the crypto currency sphere and is therefore not subject to regulatory oversight by the MFSA. The Authority is however assessing if Binance has any activities in Malta which may not fall within the realm of regulatory oversight. Admission of virtual financial assets to trading and/or for offering virtual financial assets to the public in and from Malta requires an MFSA licence in terms of the Virtual Financial Assets Act (CAP 590) of 2018.
The MFSA added that Binance did not have to leave to establish operations in the island country’s nascent digital asset industry.
The regulator pointed out that reports from the media may have incorrectly assumed that Binance is a “Malta-based cryptocurrency company.” The MFSA clarified that Binance “is not authorized by the MFSA to operate in the cryptocurrency sphere and is therefore not subject to regulatory oversight by the MFSA.”
Binance’s management said it would establish a business office in Malta in March 2018. This was after the exchange ran into issues with Japan’s regulatory authorities, when it tried to launch its operations in the country.
Maltese prime minister Joseph Muscat had proceeded, at that time, to welcome Binance to the island nation. Muscat had noted via Twitter that Malta was interested in supporting the exchange’s goal to offer crypto trading services across the globe, while becoming the “global trailblazers in the regulation of blockchain-based businesses.”
Binance’s management had noted, back in September 2018, that the company would work cooperatively with the Malta Stock Exchange (MSX), in order to offer security token trading. There had also been an announcement last year that the firm would provide the capital needed to establish a new crypto-friendly bank in Malta.
At present, it’s not clear whether Binance still has a business office in Malta.
Changpeng Zhao, CEO at Binance, has tweeted that “this is old news and has always been the case.”
Binance has sent press releases (as recently as February 11, 2020) and news updates to CoinDesk in which it noted that its headquarters are based in Malta. However, the exchange operator has not clearly stated where exactly its head offices are based.
Josh Goodbody, director for growth and institutional business at Binance, has noted previously:
“As we run such a decentralized operation, there isn’t a clear answer for that – where we operate regulated businesses (e.g. Binance Singapore, Binance U.S. etc), we have teams based there.”
The MFSA noted in its Friday announcement that it was presently “assessing if Binance has any activities in Malta which may not fall within the realm of regulatory oversight.”
The MFSA also confirmed that after introducing the Virtual Financial Assets Act of 2018, crypto and blockchain firms had to be fully licensed.