Binance Set to Move to Malta With Their Prime Minister Welcoming

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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.

Binance Moves to Malta

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.

Regulatory Troubles

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.

Speaking on the move to Malta, Changpeng Zhao or “CZ” as he is fondly called, described the country as being progressive in the area of crypto and blockchain technology. He praised the welcoming nature of the government to crypto investments and looked forward to a fruitful collaboration with the government. CZ even said that the country’s government had invited him to review an upcoming piece of legislation that was targeted at the cryptocurrency market.

Earlier in the year, the country began making plans to establish the Malta Digital Innovation Authority. According to a February 2018 article on national news outlet, The Malta Independent, this body will be given the task of regulating the crypto market as well as creating an enabling environment that would encourage and attract more crypto investors into the country.

Silvio Schembri, the country’s Parliamentary Secretary for the Digital Economy, is the main force behind the initiative. He outlined a 3-step process that would see Malta becoming a crypto powerhouse. The first step has to do with setting up the Malta Digital Innovation Authority. The second and third steps involve passing appropriate pieces of legislation that would create the framework for certification of companies and the regulation of the ICO market respectively.

Banking Collaboration and Fiat Pairs

One of the more profound benefits that is expected to come out of Binance’s move to Malta is the establishment of fiat as part of the platform’s trading pairs. Binance trades strictly in cryptocurrency pairs with no option of a crypto/fiat trading pair like some other notable cryptocurrency exchange platform. Despite this, Binance currently has a daily trading volume of $1 billion, more than any other crypto exchange platform in the world.

Binance Team

As part of the deal to move to Malta, the platform is negotiating with Maltese banks in order to have access to deposit and withdrawal services. The platform even announced that they are close to reaching agreements with a number of local banks and this could see the platform begin to offer fiat as part of its exchange/trading pairs. With such an agreement in place, Binance may even begin to seriously compete with Coinbase in the fiat/crypto trading pair market.

This move also has the potential to affect BNB tokens in a positive way. BNB tokens are the native tokens of the Binance platform and they used to carry out trading transactions on the platform. With fiat being added to the trading mix, it means that BNB tokens will be utilized in more trades. As a result, the value of BNB tokens could go up.

The Road Ahead for Binance

While the many details of the platform’s move to Malta are still being hashed out, the company has been pursuing a number of other ventures. Binance recently offered a $250,000 bounty on the hackers who were responsible for the attempted hack of the platform on March 7, 2018. In a post released on the platform’s Medium account, Binance announced the bounty, urging anyone with pertinent information to come forward. The crypto community had been thrown into turmoil when rumors concerning the Binance hack first surfaced online. However, the hackers weren’t able to steal any cryptocoins held by Binance.

The platform was praised by many within the crypto community in the way in which it managed the situation. In a market that has been dominated by successful crypto hacks, the fact that a platform could successfully repel an attack was a thing of joy to many. In the aftermath of the attempted hack, Binance announced that it was keeping $10 million aside to fund bounty campaigns for any further attempted malicious incursions.

As part of its commitment to innovations in the crypto space, Binance is also sponsoring a $1 million Dexathon with the purpose of developing a functional decentralized exchange platform. The Binance Dexathon is a coding competing (hackathon) that encourages programmers and blockchain specialists to submit protocols that could be used to create a functioning decentralized cryptocurrency exchange platform. The platform is also encouraging university teams to apply for the competition and such teams will be given a $10,000 grant irrespective of whether they win an award during the Dexathon.

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Priyeshu Garg is a software engineer at a unicorn, while he is not solving complex programming problems - he writes about blockchain and trades cryptocurrencies.

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