Binance had a pretty rough 2021 from a regulatory standpoint. The company got into one riff after another with financial regulators, chipping away at its industry reputation.
Thankfully, the company appears to be moving in the right direction in the new year.
Approvals Left and Right
Late last month, Binance chief executive Changpeng Zhao confirmed the company had obtained an operating license from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Its Canadian subsidiary, Binance Canada Capital Market, will function as a money servicing business, handling digital assets, foreign exchange, and money transfers.
As the license from FINTRAC shows, Binance now has the freedom to operate in Canada until the end of 2024. The company will likely apply for an extension if the Canadian market proves profitable.
The move makes sense. Canada stepped up cryptocurrencies adoption significantly last year, from both exchange and investment angles. As one of the world's biggest economies, Canada's crypto market is thriving.
As the world's largest crypto exchange, Binance will want to tap into this market. Zhao has expressed the company's excitement about the move and plans to get up and running as soon as possible.
Besides the breakthrough in Canada, Binance also got a boost from Bahrain. Last month, the exchange confirmed it obtained an in-principle license from the Central Bank of Bahrain to operate as a crypto asset service provider in the kingdom.
In a statement, Zhao said the approval forms an essential part of Binance's goal to build trust in crypto and blockchain technology. Mass adoption remains the main objective, and Binance hopes the approval will help people adapt to the shifting financial landscape.
Could Binance Move to the Middle East?
As for the licensing in question, Abdulkarim Haji, the director of licensing at the Central Bank of Bahrain, explained it's a matter of formalities.
Haji even floated the idea of Binance incorporating in Bahrain and establishing headquarters there. After expulsion from China, Hong Kong, and Malta, the company currently lacks an official headquarters. This absence has affected Binance in more ways than one, and Bahrain could provide the solution.
Interestingly, Binance managed to get a Bahraini license despite not necessarily complying with the country's Islamic law. The small Gulf nation is stringent with crypto business approvals, but appears to be opening up more each year.
From the other side, Binance is getting chummier with regulators and governments in the Middle East and Gulf nations. In December, it became one of the first crypto businesses to join a fresh crypto hub established by the Dubai World Trade Centre Authority (DWTCA).
As part of its membership, Binance will help the DWTCA on its mission to build a new industry hub for global digital assets. Binance will also help Dubai establish a new crypto ecosystem and long-term economic growth via digital development.
"Binance believes that Dubai's new agenda will contribute to the growth of the global economy. The goal is to assist crypto exchanges, businesses that offer blockchain and distributed ledger technology services, and a wide range of digital currencies and assets to become licensed in Dubai," the company added.
Hoping for a Better Year
The approvals from Canada and Bahrain are a positive for Binance following a torrid 2021. All through last year, the company suffered one regulatory issue after another.
From Italy to the United Kingdom, Binance got it from all sides. Even as the exchange got approval from Canada and Bahrain, it was hit with a fine of 8 million lira (about $750,000 at the time) from the Financial Crimes Investigation Board (MASAK) - Turkey's financial intelligence regulator.
According to local reports, the fine came after MASAK found Binance Turkey violated anti-money laundering (AML) regulations. Turkey's AML law requires verification of customers' information - including details like identity documents, date of birth, surname, and more.
Binance Turkey allegedly failed to implement AML laws, leading to the highest possible fine. The company can still operate in Turkey, but under heightened regulatory scrutiny.
With new approvals coming in for Binance, the company hopes to get the ball rolling in 2022. We're hoping for a better than the last, at least from a regulatory standpoint.