Binance Crypto Exchange Faces Scrutiny in Thailand, Caymans

(Bloomberg) -- Binance Holdings Ltd. is facing increasing attention from regulators, with Thailand and the Cayman Islands becoming the latest nations to weigh in on the dealings of the largest cryptocurrency exchange.

Thailand's Securities and Exchange Commission filed a criminal complaint Friday against Binance with a division of the Royal Thai Police for operating a digital-asset business in the country without a license. The Cayman Islands' financial regulator said Binance wasn't authorized to operate in the territory.

On Thursday, the Monetary Authority of Singapore said it would follow up as required with the local unit of Binance because of scrutiny from authorities elsewhere. Binance is being probed by several regulatory agencies in the U.S., including the Justice Department and the Commodity Futures Trading Commission. Japan's Financial Services Agency warned that it offered crypto services without registration. Financial Conduct Authority recent warned consumers that Binance isn't allowed to offer services in the U.K.

“The key point to keep in mind is all these squabbles concern how the crypto economy will interface with the traditional economy,” said Aaron Brown, a crypto investor who writes for Bloomberg Opinion.

Binance has long said it's a decentralized entity, operating via a slew of regional licenses, and that business units comply with local regulations. The company, which was founded by CEO Changpeng “CZ” Zhao, said it doesn't have a headquarters.

“As you can understand, we do not comment, as a matter of policy, on specific matters related to any regulators,” Binance said in a statement. “What we can say is that we take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules and laws in this new space.”

Trading volume going into the July 4 holiday weekend on Binance is down about 18% in the last 24 hours, according to data from CoinMarketCap.com, which is owned by Binance. The price of Binance Coin, tied to the exchange, declined about 2%, while Bitcoin was little changed Friday.

Binance was started in 2017, and quickly became the world's top crypto spot exchange thanks to its incentives, such as Binance Coin, and lower fees. More recently, it also became the world's top crypto derivatives exchange, and developed a new digital ledger that competes directly with Ethereum for decentralized-finance applications, crypto's hottest area.