Following worldwide regulatory concerns against crypto exchange Binance, Singapore recently announced that Binance.com may be in breach of Singapore Payment Service Act for carrying on the business of providing payment services to, and soliciting such business from, Singapore residents without an appropriate licence. As a result, it has been ordered to cease providing payment services to Singapore residents.
Separately, Binance SG, an independent entity incorporated under Binance Asia Service, continues to provide service, as they are currently exempted from holding a licence for the provision of digital payment token services. Binance SG license application is currently under review by the Monetary Authority of Singapore
In an email to local users, Binance SG clarified the ongoing MAS review. However, users will no longer be able to transfer digital assets from Binance.sg to Binance.com wef 13 Sep 2021, 12pm, until further updates.
How would this impact SG users?
There are several impacts to local users, and it is also dependent on which cryptocurrency the user is trading. In this context, we will use BTC, ETH and ADA.
Essentially, users will no longer be able to transfer digital assets from Binance.sg to Binance.com. While users may still purchase cryptocurrencies, they would be restricted to the 8 trading pairs currently available and they will no longer be able to transfer holdings to Binance.com for the purposes of swapping to other crypto such as ADA.
As exemplified under our “How to buy/delegate ADA” section, Binance.sg functioned as a midpoint, where users purchase cryptocurrency to send over to Binance.com, before swapping it to ADA and sending it to an external wallet for staking/ delegation. With the latest announcement, this would no longer be a valid option until further notice.
This leaves us with other options / local /mobilecentralised crypto exchanges such as Coinhako, Crypto.com. Each has their pros and cons and often charges way higher fees.
For Coinhako, while there are many available crypto pairs available for trading, not all have the send/rcv function till date. As such, users often have to pay the exorbitant 1% sales fees on every trade and has daily/monthly transfer. For an investor interested to send ADA for delegation, he would have to first purchase BTC/ETH (incur 1% sales fee), send it to Binance.com (last known charge was 0.0005BTC, ~$SGD$30), swap it under the BTC/ADA trading pair in Binance.com and send it to an external wallet (1 Ada) for delegation. While tedious, this method is similar to the Xfers–>Binance.sg–>Binance.com option.
For Crypto.com (mobile app), again there are many trading pairs available. However, the spreads are often higher and one would usually end up with lesser ADA compared to market. One good point is that users would be able to send direct to your wallet without going through Binance.com.
Conclusion & Huat Thoughts
It is a pity that local users will find it even tougher to purchase / stake ADA, which would reduce adoption and tx volume. With upcoming smart contracts and improved capabilities, Cardano is well poised to tackle the recurring technical challenges with BTC and ETH.
Should Cardano become the 3rd Gen decentralised crypto giant for the unbanked (and likely would), Huat feels that this would be a missed opportunity to local investors. The bright side though, is that there is still time to purchase and transfer your digital assets before 13 Sep 12pm, which is the same day where smart contracts launched on Cardano.
DYOR and make your own financial calls.