• Binance recently hired former Singapore Exchange chief Richard Teng and registered a new company in the city in June while its Monetary Authority is reviewing its payment license
  • But it’s unclear when the company plans to make the move, as a search of the Cayman Islands corporate directory shows it hasn’t been ‘struck off’ as some claim

Singapore could be the new home of Binance as the company begins the process of registering a presence on the fintech-friendly island and staffing its operations with influential hires. 

However, the narrative of Binance needing to rush to Singapore expeditiously because its corporate structure in the Cayman Islands is on the verge of being deleted isn’t exactly the case as corporate filings from the offshore territory have revealed. 

Recently, the exchange announced it had hired former Singapore Exchange executive Richard Teng as CEO of Binance Asia Services Pte, a company it registered in Singapore in 2018. But the company also has registered another firm, Binance Pte, as of June 2021. Binance also has a firm called Binance Blockchain Technology Development Pte in the city. A month prior, Binance registered another firm by the same name, Binance Ltd, in Hong Kong. 

According to experts Blockworks spoke with, Binance’s Asia Services corporation in the city exists to employ staff and provide a vehicle for registration with regulators for financial supervision. Binance’s Blockchain Technology Development Pte firm exists to license the technology behind Binance’s software to regional subsidiaries in exchange for remitting back trading fees and therefore reducing tax liability in its operating region.

Currently, Binance has dozens of local subsidiaries around the world where it employs staff and markets itself to traders. This is similar to the Dutch Sandwich or Double Irish structures employed by US technology companies like Apple or Microsoft to migrate profits from intellectual property over to tax-friendly jurisdictions. 

At this time, Binance is not licensed in Singapore under the city state’s Payment Services Act as a digital payment token services provider. The Monetary Authority of Singapore says it’s reviewing the application, but the exchange is allowed to operate under a grace period that exists until the application is approved, rejected or withdrawn.

Rushing off to Singapore?

But does Binance really need to hurry over to the capital of Southeast Asia’s financial industry? 

The narrative has been that the exchange is packing up and leaving the Cayman Islands via a “strike off” (a form of dissolution), and an apparent filing from Cayman’s corporate registrar says it’s due to be dissolved on October 29.

However, a filing retrieved by Blockworks from the island’s corporate registry has no such reference on it and says the company is still active.  

Regardless of whether Binance needs to hurry over to Singapore, it might be in the best interest for the exchange to do so given Singapore’s reputation compared to the Cayman Islands. 

“Singapore is widely considered to be the blue-chip destination for financial and regulatory security and oversight. Setting up shop in Singapore effectively gives Binance the ‘Good Housekeeping’ stamp of approval and should help to eliminate some of the headwinds they have been facing recently in other jurisdictions,” Michael Conn, CEO of Singapore-based Zilliqa Capital, told Blockworks. “Setting up their business in Singapore will make it much easier for Binance to pursue a traditional equity raise, since Singapore is not seen as a tax haven or a place for shady dealings.”

Conn calls Binance’s steps toward Singapore “exciting news” given its strong regulatory protection that doesn’t handicap innovation. 

But time will tell if Binance actually sets sail and declares a headquarters on the island. 
Even though Binance has been facing an endless supply of regulatory hurdles, the market thinks this might be soon coming to a close as its eponymous token, BNB, is up nearly 60% in the last month, according to CoinGecko.

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  • Blockworks
    Sam Reynolds is a Taipei-based reporter, covering digital assets and regulation throughout Asia. Before joining Blockworks he was an editor at Forkast News and an analyst with IDC.