Binance stopped ‘all activities focused on Israel’ following regulatory request: Report
Israel’s Capital Market, Insurance and Savings Authority reportedly never received an application from Binance allowing the exchange to do business in the country.

Major crypto exchange Binance has reportedly halted activities and marketing to Israelis following a request from one of the country’s financial regulators over licensing.

According to a Thursday report from Israel-based news outlet Globes, the Capital Market, Insurance and Savings Authority requested that Binance provide information on the services it was providing to Israelis as well as any licenses under which it operates. The regulator, responsible for handling licenses for crypto firms, reportedly never received an application from Binance allowing the exchange to do business in Israel.

"Following the intervention of the capital market, Binance has at this stage stopped marketing to Israelis and all activities focused on Israel until we examine the issue of licensing,” said the Capital Markets Authority.

Israel's flag. Source: Pexels

Binance’s website no longer lists Israel’s shekel as a payment option for buying crypto, a feature that was introduced in February 2020. However, at the time of publication, the platform’s job listings still include seven opportunities to work with the exchange in Israel.

In July 2021, Binance CEO and founder Changpeng Zhao said he wanted the exchange to work with local regulators as it establishes offices in other countries. However, Binance is still facing regulatory scrutiny as authorities in Italy, Malaysia, Poland, Germany, the United Kingdom, the Cayman Islands, Thailand, Canada, Japan, Singapore and other nations have issued statements either claiming the exchange was operating illegally or otherwise warning investors to exercise caution.

With a population of roughly a million people, Israel has seemingly welcomed the introduction of digital assets under the proper regulatory framework. President Isaac Herzog received a nonfungible token representing when he took the oath of office in July, and the country’s central bank has been exploring the introduction of a digital shekel for almost five years.

Reuters: Binance was withholding information from regulators, repeatedly shunned own compliance department
According to the investigation, the world’s largest crypto exchange pursued growth while dodging regulatory scrutiny.

In a report published on Friday, Reuters laid out the findings of its investigation into the regulatory compliance practices of Binance, the world’s largest cryptocurrency exchange by trading volume.

The authors suggest the existence of a recurring pattern whereby the company’s CEO Changpeng Zhao, while proclaiming its openness to government oversight, ran an organization that systematically denied regulators’ requests for financial and corporate structure information and shirked proper client background checks.

The reported findings are based on the accounts of Binance’s former senior employees and advisers, as well as the review of documents such as internal correspondence and confidential messages between several national regulators and the company. According to the document, several high-ranking employees have repeatedly raised concerns of weak Know Your Customer/Anti-Money Laundering (KYC/AML) standards at the company but were ignored by the CEO.

Additionally, the company reportedly acted against the recommendations of its own compliance department when it continued onboarding new customers from seven countries designated to be of extreme money-laundering risk.

The big-picture takeaway that the authors of the report offered is that the described pattern of behavior allowed Binance to maintain ambiguous jurisdictional affiliation and opaque corporate structure while offering financial products that would normally require regulatory approval or licensing in many of its countries of operation.

SEC chair hints at no spot Bitcoin ETFs yet, but cites ‘careful consideration’ for future
Gary Gensler hinted that the SEC was no closer to approving a Bitcoin spot ETF in the United States capable of preventing “fraudulent and manipulative acts and practices” by the standards of the Exchange Act.

Gary Gensler, chair of the U.S. Securities and Exchange Commission, has responded to a letter from lawmakers calling the regulator denying approval of Bitcoin spot exchange-traded funds “unacceptable.”

In a Tuesday letter from Gensler addressed to Minnesota Representative Tom Emmer, the SEC chair hinted that the regulatory body was no closer to approving a Bitcoin (BTC) spot ETF in the United States capable of preventing “fraudulent and manipulative acts and practices” by the standards of the Exchange Act. Gensler reiterated his stance of being technology-neutral, but that he would give “careful consideration” to the concerns Emmer raised in November.

We received a response from SEC Chair Gensler to our 11/3/21 letter regarding BTC spot ETFs. This issue remains a priority for us and we will continue to oversee the SEC in its mission to maintain fair and orderly markets and facilitate capital formation. February 17, 2022

Gensler took more than three months to respond to a letter from Emmer and pro-crypto Representative Darren Soto. The pair advocated for the SEC to approve Bitcoin spot ETFs, with Soto calling crypto “a driver of economic growth” in the U.S. and “crucial for us to clearly regulate it in order to maximize the potential benefits and mitigate any risks.”

“The SEC’s approach to cryptocurrency regulation has been unacceptable,” said Emmer in the November letter. “While the trading of Bitcoin futures ETFs is a great step forward for the millions of American investors who have been demanding regulatory clarity, it does not make sense that Bitcoin spot ETFs cannot also commence trading.”

To date, the SEC has not approved any Bitcoin spot ETF application from a financial institution despite some lawmakers and industry leaders criticizing the commission’s inaction for holding the United States back on innovative investment vehicles. However, after Gensler hinted in August 2021 that he would be more open to accepting ETFs based on crypto futures rather than through direct exposure, many companies filed crypto "strategy" ETF applications with the SEC. The commission has since approved ETFs linked to BTC futures from Valkyrie, ProShares and VanEck.

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