One of the most sensitive issues for any cryptocurrency exchange is the country within whose jurisdiction it will be located. What giants of the crypto world like Binance do not escape. After the Malta government regulatory agency, the Malta Financial Services Authority (MFSA), denied that the exchange has permission to operate in its territory.
Regulation and cryptocurrencies
An old saying says that there is nothing more cowardly than a dollar, and within the crypto world we know that very well. Well, if there is not enough legal certainty for investors to feel comfortable putting their money in a company. There will be no way in which they want to risk their capital in it.
Which represents a problem of enormous proportions for cryptocurrency related projects. Well, despite the fact that the presence of capital in the crypto market is vital for crypto assets to stay afloat. Normally this sector faces serious deregulation that repels potential investors.
And, in most countries of the world, cryptocurrencies are in a situation of “allegiance.” Without being prohibited by law, but without being protected by it. This leaves cryptoactive users in a serious defenseless situation in the face of attacks against their property.
This allegiance especially affects cryptocurrency exchanges. Main way through which investors can place their capital in the cryptoactive market. And whose legality is questioned in most countries of the world. Having to locate your domicile in the territory of certain very specific States, which provide all the necessary regulatory facilities for your business.
The Binance case in Malta
Thus, the location of an exchange turns out to be one of the main themes for it. Well, this tells investors under what set of legal rules the platform operates. And therefore, what things the company can and cannot do, depending on the country where it is located, be it Malta, the Seychelles, Switzerland or any other.
In the case of Binance, until 2018 the exchange was located in the territory of Japan. However, excessive pressure from the Japanese government against the cryptocurrency company forced it to relocate its operations. Malta being the destination announced by the company’s board of directors.
An aspiration that apparently would not have been completed successfully. Well, today, the Malta Financial Services Authority has issued a statement denying that Binance has permission to operate in its territory. This is due to the information published in several newspapers of the island, saying that Binance had its headquarters in it.
«Following a report in a section of the media in which Binance is referred to 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 field of cryptocurrencies and, therefore, is not subject to the regulatory supervision of the MFSA«, Says the statement.
This would leave the crypto community wondering where Binance has its legal domicile, after the exchange announced a few years ago that it would be Malta. Well, despite the fact that Binance founder Changpeng Zhao announced on other occasions that the exchange does not have a fixed headquarters. The address is a fundamental fact to know under what regulations a company is governed. What makes this question our Data of Today here at CriptoTendencia.
International Studies student, interested in economics and international politics. Passionate about the progress of the Fourth Industrial Revolution in general and cryptocurrencies in particular.