On March 23, 2018, Binance announced via a post on its Medium account that it would be setting up an operational base in Malta. According to the blog post, the decision to move to Malta was taken after it had considered several different viable locations before settling on the island nation of Malta. The news immediately sparked interest throughout the community based on the pedigree of Binance and the events that had occurred in the lead up to the announcement.
Despite being less than a year old, Binance is now the largest cryptocurrency exchange platform in the world based on traded value. Such has been the rapid rise that Binance has experience that its quarterly profits have increased from $7.5 million to $200 million. This is an astonishing increase of more than 2,700 percent and it is unprecedented in the history of the financial market. Binance is also reputed to be the fastest growing fintech unicorn in the world.
Since it began operation, the company hasn’t had an official headquarter with its base of operations being kept secret. In the aftermath of the Chinese ICO ban, the company opened offices and server locations in South Korea, Japan, Taiwan, and Hong Kong.
The operation of Binance in the Asia Pacific theater has been coming under increased scrutiny from regulatory bodies. In both Japan and Hong Kong, the company has had to deal with a number of issues with the regulatory agencies in these countries. The Chinese ICO ban forced Binance to look elsewhere in Asia and at that time, Japan was the place to be for many Asian crypto exchange platforms.
The Financial Services Agency (FSA) of Japan issued licenses to a number of cryptocurrency exchange platforms, though Binance was not among them as its application is still under review. The Coincheck hack of January 2018 forced the FSA to begin to adopt a tougher stance towards crypto exchange platforms. The authorities in Japan clashed with Binance over operating in the country without the necessary registration.
In Hong Kong, Binance hasn’t had any luck either in its negotiations with the Securities and Futures Commission. The platform was 1 of 7 that received a warning letter from the Commission not to trade digital assets that had been classified as securities under the law in Hong Kong. According to the CEO of Binance, Changpeng Zhao, the platform had entered into negotiations with the authorities in Hong Kong but he admitted that the talks were nowhere near any sort of resolution.
Malta: An Aspiring Blockchain Hub
The move to Malta by Binance is indicative of a fledgling blockchain-utopia that is being developed in Malta. While EU crypto regulations remain quite strict, Malta has tried to position itself as a crypto-friendly country in a bid to attract many crypto investors to bring their businesses into the country. In the aftermath of the announcement, the Prime Minister of the country, Joseph Muscat posted a personal welcome message to the platform via Twitter. The Maltese Prime Minister is a known supporter of bitcoin, cryptocurrency, and blockchain technology.