Binance Not Registered in Cayman Islands, Regulator Starts Investigation

Multiple press reports mentioned Binance to be operating out of the islands.

Binance’s regulatory worries are far from over, as the Cayman Islands Monetary Authority (CIMA) is the latest regulatory to announce that the cryptocurrency exchange is not registered or licensed by the regulator to operate under its jurisdiction.

Friday’s announcement by the regulator specifies that none of Binance, Binance Group, Binance Holdings Limited are ‘registered, licensed, regulated or otherwise authorized’ by the regulator. 

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The clarification came after multiple press reports termed Binance as a crypto exchange based out of the Cayman Islands. “…the Authority reiterates that Binance, the Binance Group or Binance Holdings Limited are not subject to any regulatory oversight by the Authority,” CIMA stressed.

The Cayman Islands has specific laws for virtual asset services or custodian services that require such companies to either be ‘regulated or licensed’ under the Virtual Asset (Service Providers) Act, 2020. But, existing regulated entities can receive a waiver under the VASPA.

The regulator has now initiated an investigation against the cryptocurrency exchange to check if Binance or any of its affiliates are operating from the island.

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“The Authority is currently investigating whether Binance, the Binance Group, Binance Holdings Limited, or any other company affiliated with this group of companies has any activities operating in or from within the Cayman Islands which may fall within the scope of the Authority’s regulatory oversight,” the regulator noted.

Binance Not Operating in the Cayman Islands

BInance reached out to Finance Magnates saying that it does not run a crypto exchange from the Cayman Islands and the media reports pointing that out was incorrect.

“Binance.com has always operated in a decentralized manner. Binance.com does not run a cryptocurrency exchange out of the Cayman Islands, as reported incorrectly in some media articles. 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. We will work with regulators to address any questions they may have,” a Binance spokesperson said.

Binance vs Regulators

Recently, Binance Markets Limited, one of the subsidiaries of the crypto exchange group, has been flagged by the UK’s financial market watchdog for not being regulated in the country, which is mandatory for crypto exchanges. Japan’s FSA warned that despite not registering itself, Binance is still illegally operating in the country.

Meanwhile, Binance proactively pulled its business out of Canada’s Ontario province due to growing regulatory tensions. The exchange even deployed CipherTrace Traveler to comply with the FATF’s Travel Rules.

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