Financial supervision of Binance: No authorisation to operate in Malta

The Maltese Financial Services Authority (MFSA) claims that it never allowed the large cryptographic currency exchange Binance to operate in the country.

On 21 February, MFSA issued a public statement saying that Binance “has no authorisation from MFSA to operate in the crypto-currency field”. The authority pointed out that Binance had recently been mistakenly referred to in media reports as a “crypto-currency company from Malta”, although the exchange “may not fall within the scope of regulatory oversight”.

Major local news platforms, such as Malta Today, have described Binance as a crypto company regulated in Malta. The MFSA is said to have made a similar statement earlier. In that declaration it said:

“Following a report in which Binance was referred to in a section as a ‘Malta Crypto Currency Company’, the Malta Financial Services Authority (MFSA) confirms that Binance has not been authorised by the MFSA to operate in the crypto currency field. It is therefore not subject to regulatory supervision by the MFSA”.


The MFSA also stressed that an MFSA licence under the Virtual Financial Assets Act 2018 is required to operate a crypto company in the country.

Cointelegraph asked Binance to comment on this, but has not yet received a response. This article will be updated as soon as there is a response.

Cointelegraph reported that Binance announced its intention to open a branch in Malta in 2018 after the stock exchange came under pressure from Japanese regulators and decided to seek a new location. The CEO of Binance Changpeng Zhao (CZ) said at the time that he had been invited by the government to Malta to examine a planned draft law that would be favourable to crypto-companies.

In September 2018, a Fintech branch of the Maltese Stock Exchange signed a letter of intent with Binance. This involved the joint opening of a new digital securities token exchange.


Where is Binance based?

The question of where Binance is formally based does not arise for the first time. At the end of last year, the crypto market collapsed because of reports of a raid on Binance’s suspected branch in China. Binance subsequently denied these reports:

“The Binance team is a global movement of people who work in a decentralised way wherever they are in the world. Binance has no permanent offices in Shanghai or China, so it makes no sense to say that the police raided the offices and then closed them”.

Changpeng Zhao, the CEO of the company, has previously criticized the idea of centralized offices and headquarters. He twittered: “Offices and headquarters are old concepts like SMS and MMS. Times are changing…”

Previously, there was an unexpected technical problem on Binance, which was reported on 19 February. As the exchange announced, Binance has temporarily suspended most of its trading services due to unscheduled maintenance.