Binance Investigated By The Cayman Islands

Despite the numerous media reports going round that Binance is incorporated in the Cayman Islands, the Cayman Islands Monetary Authority (CIMA) has said that Binance is not licensed by the regulator to operate a Cryptocurrency exchange business within or from the Western Caribbean Islands. 

CIMA has joined a list of global financial watchdogs that are putting a lot of scrutiny on Binance and its business dealings in the past month. 

In an attempt to clear the air, the CIMA, in an announcement on its website published on July 1, 2021 said it was informing the general public that none of Binance, Binance Holdings Limited or the Binance Group is running a Cryptocurrency exchange business from or within the Cayman Islands under its regulatory oversight. 

An excerpt from the release by CIMA read, “the authority is currently investigating whether Binance, the Binance Group, Binance Holdings Limited or any other company affiliated with this group of companies has any activities operating in or from within the Cayman Islands which may fall within the scope of the Authority’s regulatory oversight.” However, the press release did not make any accusation of any potential wrongdoings on the part of the exchange. 

The British overseas territory regulatory body said in its release that any company registered under the Cayman Islands Companies Act of 2020 that provides virtual asset or custodian services as a business from or within the Islands must be registered in accordance with the Virtual Asset (Service Providers) Act, (VASPA). 

In its response to the development, a spokesperson of the exchange says said, “ has always operated in a decentralized manner. does not run a Cryptocurrency exchange out of the Cayman Islands, as reported incorrectly in some media articles previously.”

The exchange added, “We do however, have entities incorporated under the laws of the Cayman Islands performing activities that are permitted by the law and not related to operating cryptocurrency exchange trading activities. We will work with regulators to address any questions they may have.”

When consulted, the business registration records of the Cayman Islands showed that Binance Holdings Limited is incorporated as a business entity in the territory of the Islands.

Spate of Global Scrutiny 

Binance has come under strict scrutiny by financial regulators in countries across the world. In May, on top of the inquiry the exchange was facing from the U.S Commodity Futures Trading Commission, it was reported that the crypto exchange firm was facing an investigation by the U.S Internal Revenue Services and the Department of Justice. 

In June, the company received another hit when the Japanese Financial Services Agency issued a warning stating that Binance which is still offering services to Japanese residents was doing so without a proper license or having registered with the financial watchdog. Binance in its response to this said it “does not currently hold exchange operations in Japan, nor do we actively solicit Japanese users.” 

In June, amidst a regulatory crackdown, the exchange announced that it was closing its operations in Canada’s largest province, Ontario. The company advised all its Ontario-based users to close out their open positions by December 31, 2021. 

In the tail end of June, the United Kingdom’s Financial Conduct Authority in an issued statement, banned the exchange’s UK organisation, Binance Markets Limited from taking part in any regulated activities in the country. 


A first glance at all of these “attacks” on Binance and one can only see evidence of how regulators worldwide have such little control over the crypto exchange giants. It all seems like a show of power and authorities exploring means by which they can exert more of their will and control on an industry they are still scratching their heads about. In the end, it just seems like the two sides (Binance and regulators) will meet each other halfway and find a way to co-exist.

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