Binance To Setup Crypto-Fiat Exchange In Malta

  • Binance close to closing a deal to open a fiat to crypto exchange in Malta
  • Binance has been struggling to secure a license in Japan 
  • Malta looking to open its doors to blockchain business

Yesterday, news broke from Nikkei that the Japanese financial regulatory body – the FSA (Financial Services Agency) – was planning on warning Binance that they must register as an exchange or face legal action. 

Binance appears to have been planning for this eventuality and is looking to setup a crypto-fiat exchange in Malta due to its favourable legal landscape.

CEO Zhao Changpeng recently told Bloomberg it is looking to build a “fiat to crypto exchange” in Malta. According to the CEO, the company is close to signing a deal with the local banks to secure deposits and withdrawals. However, it is uncertain when this exchange is looking to launch.

The choice of Malta may seem strange considering the exchange is predominantly based in Asia; Zhao Changpeng explained the decision to Bloomberg saying that:

“Malta is very progressive when it comes to crypto and fintech.”

Zhao Changpeng Binance CEO

Malta Opens Doors To Blockchain

Jurisdictions such as the U.S. and China have been clamping down on crypto-asset exchanges either shutting them down completely as China have done, or making operations exceedingly difficult as is the case in the U.S.. Listing any altcoins which are deemed a security in the U.S. requires registering with the SEC and CFTC; this compliance is hard to get and expensive. 

Malta is looking to become a hotspot for crypto-asset innovation by relaxing regulations. The small nation may have secured a deal with one of the largest companies in crypto, a move that will surely bring jobs and tax to Malta.

Joseph Muscat, Malta’s prime minister, has said they aim to be “global trailblazers in the regulation of blockchain-based businesses” and recently welcomed Binance to Malta:

Binance Dominance

If the license in Malta is secured, the company will have two operational exchanges: the pre-existing exchange which is purely crypto to crypto with little to no KYC/AML compliance and the fiat to crypto exchange in Malta which will likely require greater KYC and AML procedures in order to secure and maintain its banking partners - they will not want to expose themselves to the risks of money laundering or terrorist financing claims.

To further their dominance in all aspects of crypto-asset trading, they are apparently in development of a “fully decentralised exchange” that will run on a “tailored blockchain” called Binance Chain.

The DEX (decentralised exchange) will work alongside their existing business model which, if successful, would mean Binance will operate three tiers of crypto exchanges. This would surely lock in their place as the world's largest cryptocurrency exchange.

Tether Prints $20 Million Worth of USDT as Bitcoin's Price Struggles

  • The @WhaleAlert Twitter account notes Tether treasury minting $20m-worth of new USDT
  • $10m makes its way immediately out into the wild as the price of Bitcoin skirts just above $10,000 
  • USDT treasury movement are closely watched as indicator of potential market moves

The team behind cryptocurrency's prevalent stablecoin, Tether, have been rolling their printers again, minting $20 million worth of the controversial trading coin. 

The transaction was noted by the Whale Alert Twitter account in the following tweet:  

10 million on the new crypto then almost immediately made its way out into the wild via one massive move...

The issuance came as the price of bitcoin began to dip back towards the $10,000 mark again, a level that it has been skirting for the past day or so. Indeed, the movements of the Tether treasury are closely watched by cryptocurrency traders and enthusiasts, with CryptoCompare's July Exchange Review noting that 67% of all BTC trading across its analyzed markets is in pairing with USDT, meaning extra liquidity heading into the market from its treasury could be seen as an indicator of impending price action. 

Also keeping the crypto on the radar of market watchers its chequered history, and its somewhat opaque accounting and management structure. Whether Tether is consistently backed by the cash deposits that are meant to underpin its relationship to the US dollar - currently its circulating supply is some $4 billion-plus - has long been a subject of fierce conjecture and debate, which the company's own statements have done little to abate.

Similarly, its past management connections to the under-fire crypto exchange BitFinex have consistently invoked ire, and led to a fairly large premium on the price of buying bitcoin with USDT at numerous points in last year or so

Also consistently scrutinized is the stablecoin's relationship to the market prices of cryptocurrency in general, with accusations in many quarters that it serves to facilitate market-altering price pumps, especially in the high-volume BTC markets that serve as a bellwether across the wider altcoin market.

This issuance of $20 million worth of USDT is in fact fairly small beer by Tether's standards, however, indeed in July a mistake saw it issue $5 billion USDT in a single day when it botched an attempt to mint 'just' USDT$50m.   

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