Binance Takes P2P Service Measures in Response to Sanctioned Russian Banks

HKMA Issues Warning Against Crypto Firm MisrepresentationThe Hong Kong Monetary Authority (HKMA), the central bank for the Chinese autonomous territory, has taken a stand against cryptocurrency businesses that falsely present themselves as “banks” and market their products as “deposits,” issuing a public advisory to raise awareness about the issue.Photo by Marcel Eberle on UnsplashBanking ordinance violationsIn a press release published to its website on Friday, the HKMA said that instances had arisen where crypto firms had labeled themselves as “crypto banks,” “crypto asset banks,” and “digital trading banks.” The regulatory authority underscored that such misrepresentations could be in violation of the Banking Ordinance in Hong Kong.In addition to adopting misleading bank-related titles, these crypto firms have been advertising “savings plans” as “low risk” with “high return,” potentially misleading the public into believing that these entities are authorized banks in Hong Kong, where they can securely deposit their funds.The HKMA stressed that only entities such as licensed banks, restricted license banks, and deposit-taking companies, collectively referred to as “authorized institutions” and holding a license granted by the HKMA, are legally permitted to engage in banking or deposit-taking activities in Hong Kong.Furthermore, funds held on crypto exchanges are not covered by Hong Kong’s Deposit Protection Scheme. “Under the Banking Ordinance, only licensed banks, restricted license banks and deposit-taking companies, which have been granted a license by the HKMA can carry out banking or deposit-taking business in Hong Kong,” the HKMA stated.Misuse of banking termsAny entity using the term “bank” in its business name or implying that it offers banking services in Hong Kong is committing an offense, according to the central bank. The same rule applies to any entity engaging in deposit-taking activities in Hong Kong or soliciting the public to make deposits.It’s important to note that crypto firms not officially recognized as banks in Hong Kong are not subject to the oversight of the HKMA.The HKMA advised the public to exercise caution. In cases of uncertainty regarding an entity claiming to be a bank or soliciting deposits in Hong Kong, individuals are encouraged to consult the register of authorized institutions on the HKMA’s website, and if doubts persist, it suggests that they should contact the authority via its Public Enquiry Service hotline.According to section 97 of the Banking Ordinance, only a bank or a central bank can use the term “bank” or its derivatives in its business name in Hong Kong without the written consent of the HKMA.Additionally, sections 11 and 12 of the Banking Ordinance stipulate that only entities possessing a valid banking license or recognized as authorized institutions are permitted to engage in banking or deposit-taking activities in Hong Kong. As per section 92 of the Banking Ordinance, only an authorized institution is authorized to issue advertisements inviting the public to make deposits, with certain exceptions.The HKMA’s advisory serves as a stern reminder to the crypto industry that regulatory compliance and transparency are essential, particularly when using terms associated with traditional banking, to protect the interests of the public.

Komainu Secures FCA Approval in Boost For Crypto Custody in the UKKomainu, a digital asset storage firm backed by Tokyo-based global financial services group Nomura, has received approval from the UK’s Financial Conduct Authority (FCA) to operate as a crypto custodian wallet provider.Photo by Robert Tudor on UnsplashPaving the way for broader service offeringThe Jersey-headquartered Nomura portfolio company outlined details of its regulatory success in a blog post published on Friday. This regulatory milestone marks a pivotal moment for Komainu’s expansion within the UK market, allowing the firm to amplify its crypto service offering in the UK.The approval paves the way for the firm to offer collateral management services through its platform, Komainu Connect. Sebastian Widmann, Head of Strategy at Komainu, expressed the company’s intention to furnish institutional custody services, a fundamental aspect of the swiftly advancing cryptocurrency market. He also underscored Komainu Connect’s role as a premier collateral management solution within the UK.Komainu’s CEO, Nicolas Bertrand, spoke to the United Kingdom’s pivotal role in the global financial technology sector. He accentuated the UK’s position as a critical hub for fintech, bridging the realms of traditional finance and decentralized finance. The FCA’s endorsement underscores Komainu’s efforts in attempting to deliver secure and compliant cryptocurrency custody services.“This is a key regulatory milestone as the UK remains one of the most important hubs for financial technology and innovation that will spur the convergence of traditional and decentralized finance,” stated Bertrand.This recent approval is not an isolated achievement for Komainu. The firm has been building up recognition for its adherence to regulatory compliance. In August, it secured a full operating license from Dubai’s Virtual Asset Regulatory Authority, reinforcing its dedication to adhering to global regulatory standards.Additionally, being headquartered in Jersey, Komainu falls under the jurisdiction of the Jersey Financial Services Commission, ensuring that the firm also adheres to those local financial regulations.The company previously unveiled an agreement with local authorities, focusing on secure digital asset storage during investigations. This partnership is demonstrative of efforts made by the firm in fostering transparency and security within the cryptocurrency ecosystem, aligning with the broader regulatory objectives of the UK government.Further ambitionsHowever, Komainu’s presence is expected to reach beyond the shores of the UK and Dubai. Coinshares, one of Komainu’s parent companies, recently introduced its hedge fund division, Coinshares Hedge Fund Solutions, signaling its intent to venture into the US market. This strategic maneuver will provide eligible American investors with access to Coinshares’ array of private investment products, further cementing its global presence in the cryptocurrency sector.In June the firm partnered with Seychelles-based global crypto platform OKX. As part of that deal, the digital assets custodian will store and custody digital assets on behalf of OKX's institutional clients.With a positive track record thus far where regulatory compliance is concerned, Komainu is positioning itself for further growth and innovation relative to a fast-developing crypto sector.

Regulatory Pressure Sees Binance Cease Card Offering in the Middle EastLeading global crypto exchange Binance has announced the discontinuation of its card services in the Middle East.Users hailing from the region will have until September 21 to maximize the utility of their Binance cards before the product will no longer be available to them. Latin America is another region which will be similarly affected by the decision. Binance Customer Support stated: “The Binance Card will regrettably no longer be accessible to users based in Latin America and the Middle East.”Photo by rupixen.com on UnsplashEnabling crypto spendingDistinct from conventional debit cards, these Binance cards have offered users the convenience of settling day-to-day expenses with crypto assets. However, this unique feature is now set to become a relic as the exchange shifts its strategy in response to evolving regulatory dynamics.It’s worth noting that this product curtailment will only impact less than 1% of users situated in these regions. Other Binance services around the world will continue unimpeded. That said, products like this one are significant as they help to bridge the gap between the crypto sphere and conventional commerce.As a substitute, Binance is actively championing its “Binance Pay” platform, touting it as “an advanced cryptocurrency payment solution that is both contactless and internationally accessible.”Checkout.com setbackFinancial pundits are speculating that this strategic move could be closely intertwined with recent realignments in Binance’s corporate partnerships. Notably, the UK-based payment processor, Checkout.com, severed its connections with Binance earlier this month amidst mounting regional regulatory interventions and concerns.Responding to this severed partnership, Binance has indicated a contemplation of legal recourse against Checkout.com’s decision. The backdrop of this collaboration has been problematic since its inception in 2020. Initial troubles surfaced when the absence of the 3-D Secure system facilitated a criminal syndicate to conduct a $10 million transaction spree on Binance.Clash with global regulatorsRecent months have seen Binance find itself entangled in a web of legal battles. The US Securities and Exchange Commission (SEC) leveled allegations against Binance, accusing the exchange of deceiving regulatory bodies and mishandling customer funds.Meanwhile, French authorities have intensified their scrutiny, suspecting Binance of potential involvement in money laundering activities. As a domino effect, Binance had to exit numerous markets due to its inability to meet the stringent compliance criteria. Over the course of just three months, the company has lost its ability to trade in Germany, Canada, Belgium, the Netherlands, and Cyprus.Asian pivotAs the company comes under pressure in Western markets, it has focused on furthering its offering in the Asian region. In May, its subsidiary, Gulf Binance, successfully acquired a trading license in Thailand. Later that month, the company announced plans for a dedicated platform for Japanese customers.Parrot Capital, a decentralized hedge fund, has issued a direct recommendation to Binance Card users in response to the news:“Check your daily limits. Withdraw via ATM all your funds or spend them ASAP or risk losing them for good.”This sustained and pervasive scrutiny underscores the formidable challenges faced by the leading crypto exchange. As the regulatory landscape evolves, exchanges like Binance are being forced to re-calibrate in order to navigate an ever-changing environment.