The giant Asian crypto group has decided to halt crypto trading in Singapore after regulatory hurdles. It will now focus on blockchain technology and is seeking physical headquarters.

Singapore’s Binance Asia Services, part of the world’s largest cryptocurrency exchange, has withdrawn its application for a crypto licence in the country following pushback from regulators; it will stop trading on its platform early next year.

The company was among 170 crypto firms that had applied for a digital payment token licence in Singapore, allowing them to offer digital assets services locally. It had been operating under a temporary exemption during the licensing process.

Binance Asia said it has taken into account “strategic, commercial and developmental considerations globally” in its decision to withdraw its Singapore application. The move will give Singapore customers until mid-February to move their crypto assets off the platform. The company said “registered users who have not passed [know your customer] checks” would be suspended immediately, while new users will not be accepted, and existing users will not be able to deposit assets on the exchange, though they can continue crypto trading until 12 January. 

Instead, the group will focus its Singapore efforts on a blockchain innovation hub with initiatives including incubation programmes, blockchain education and investments.

The company’s decision to withdraw its application follows an order by the Monetary Authority of Singapore in September to Binance Singapore to stop all crypto transfers within the global exchange binance.com which the regulator placed on an investor alert list over concerns with the group’s policies and procedures to protect consumers. 

Earlier this month, Binance Asia invested in a regional private securities exchange called Hg Exchange with an 18 per cent stake. HGX has a licence to trade shares in private companies as well as tokenised assets, including rare whiskey.

“This investment made our own application somewhat redundant,” Binance’s co-founder and chief executive Changpeng Zhao tweeted earlier this week. “We will continue to work through our partners to grow the crypto industry in Singapore.”

Earlier this year, the UK’s Financial Conduct Authority issued guidance prohibiting Binance Markets, part of the Binance Group, from undertaking any regulated activity in the UK, along with a warning about investing in crypto assets. Crypto investors can access Binance’s offshore exchange regardless of whether the group operates in their location.

Alternative HQ for Binance    
The move to shut down its Singapore crypto operations represents a setback to the group’s attempts to establish operations in a major financial centre. Zhao has been based in Singapore for two years and there had been speculation that it would become its global headquarters.

Binance Holdings, founded in China in 2017, has no global base yet, with Zhao instead incorporating firms in locations where Binance operates. It may be eyeing Europe and the Middle East. Zhao bought his first-ever home in Dubai recently to show a commitment to the authority which he described as “very pro-crypto” last month.

Dubai takes a relatively liberal approach to digital asset regulations. The emirate's Financial Services Authority unveiled a digital-asset framework recently, and regulators in the UAE are working on a framework to approve and license firms that offer crypto services. However, Binance said it has already decided on a location for its headquarters and will be announcing it soon, according to Bloomberg.

HSBC and Wells Fargo announced this week that from Monday they will settle currency trades with blockchain, another example of how the technology that underpins crypto is taking new forms.