Binance's Troubles Grow as Thailand Files Criminal Complaint — Similar Warnings by Cayman Islands, UK, Japan

A growing number of regulators worldwide have come after Binance. Thailand’s Securities and Exchange Commission (SEC) filed a criminal complaint against the crypto exchange after the authorities in the Cayman Islands, the U.K., and Japan issued similar warnings on Binance and related companies.

Thailand’s Regulator Files Criminal Complaint

The Thai Securities and Exchange Commission announced Friday that it “has filed a criminal complaint against Binance … with the Economic Crime Suppression Division of the Royal Thai Police (ECD).” According to the SEC:

Binance has solicited the Thai public and investors to use its services, either via its website or Facebook page: Binance Thai Community.

The securities regulator stated that it issued a warning letter to Binance on April 5 but the company failed to submit a response within the specified time.

The SEC said that Binance is operating a crypto exchange business without a license. The company is therefore “liable to criminal sanction under Section 66 of the Digital Asset Businesses Emergency Decree, i.e., imprisonment for a term of two to five years and a fine of 200,000 to 500,000 baht and a further daily fine not exceeding 10,000 baht for every day during which the contravention continues.”

Cayman Islands Warns About Binance

The Cayman Islands Monetary Authority (CIMA) published a notice on its website Thursday stating that Binance is not authorized to operate a crypto exchange in the country. The notice reads:

Binance, the Binance Group and Binance Holdings Limited are not registered, licensed, regulated or otherwise authorised by the authority to operate a crypto-currency exchange from or within the Cayman Islands.

CIMA emphasized that companies incorporated in the Cayman Islands must either be “registered or licensed in accordance with the Virtual Asset (Service Providers) Act, 2020 “ or be “an existing regulated entity that has been granted a waiver by the authority.”

Recently, two other regulators issued warnings on Binance: the U.K.’s Financial Conduct Authority (FCA) and Japan’s Financial Services Agency (FSA).

What do you think about so many regulators coming after Binance? Let us know in the comments section below.

New Bill to Ban Crypto Payments in Iran, Support Mining and Regulate Exchange

Urged by the growing popularity of cryptocurrencies, Iranian lawmakers have prepared new legislation to introduce comprehensive rules for the expanding industry. While the bill effectively bans crypto payments in the country, it aims to support cryptocurrency mining and regulate the exchange market.

Draft Law Prohibits Crypto Payments in Islamic Republic

Members of the Islamic Consultative Assembly, the Iranian parliament, now have a plan to put the crypto space in order. The new bill, drafted under the supervision of the parliamentary Economic Commission, allocates responsibilities among regulators and answers some outstanding questions to determine the future of cryptocurrencies in Iran.

If adopted in its current version, the draft law would ban the use of cryptocurrencies as a means of payment in the Islamic Republic, Tasnim News Agency reported. Besides crypto payments, other domestic transactions with cryptocurrency would also be prohibited. Iranian lawmakers have provided for only one exception and that’s reserved for a state-issued digital currency (CBDC).

The Central Bank of Iran (CBI) is to take charge of crypto market oversight within three months of the bill’s adoption. The monetary institution will also regulate the exchange of cryptocurrencies in the country. Iranian authorities have tried to curb crypto trading in the past few months but the CBI authorized domestic banks and exchangers to utilize cryptocurrency mined inside Iran in payments for imports.

Iranian Regulations to Support Cryptocurrency Mining

The legislation presented in the Iranian Majlis has also been described as a plan to foster “support for cryptocurrency mining and organizing the domestic market for exchanges,” Tasnim noted. Unlike digital coin trading, crypto mining has been a legal activity for licensed Iranian companies for around two years now.

According to the draft, Iranian cryptocurrency miners will in the future be allowed to participate in projects to construct and operate new power plants. In order to do that, authorized mining companies will need to acquire special permits from the Ministry of Energy, the report detailed. Miners will even be able to sell surplus energy generated by their stations.

Iran’s Ministry of Industry, Mines and Trade will exert regulatory control over the crypto mining industry, the bill postulates. The department will continue to be responsible for issuing the licenses needed to set up and run new cryptocurrency mining farms.

The lack of comprehensive regulations and various restrictions have impeded the development of Iran’s crypto industry in the past few months. In May, the Majlis leadership called on financial regulators to adopt a cautious approach to dealing with the complicated matter. In June, the country’s Economy and Finance Minister Farhad Dejpasand stated that the government cannot interfere with the development of crypto technologies for too long.

What’s your opinion about the proposed crypto regulations in Iran? Let us know in the comments section below.

Dubai property market continues to rebound in Q2 as villa values soar

ValuStrat Price Index reveals 3.8% growth in real estate prices during the April to June period compared to the previous quarter

Villas continued to drive the recovery in Dubai real estate prices during the second quarter of 2021, according to consultants ValuStrat.

Its ValuStrat Price Index, which has been expanded to cover more locations in the city, grew by 3.8 percent during the April to June period compared to the previous quarter.

This increase cancelled almost all the capital losses of the previous year, ValuStrat said in a statement on Saturday.

It added that in June the index registered 69 points compared to 69.4 points in the same period last year.

Despite the recent rebound, there is still a long way to reach 100 points registered as of January 2014, not to mention the peak of June 2014 which saw the citywide VPI achieve 112.9 points.

Villas, which represent 13 percent of the residential market in Dubai, spearheaded the Q2 growth with a quarterly growth of 7 percent and an annual growth of 6.3 percent

ValuStrat said all villas monitored by the basket saw improvements not seen since 2014. The highest annual capital gains were found in The Meadows, Arabian Ranches, The Lakes, Jumeirah Islands, Dubai Hills Estate and Mudon.

Quarterly, the apartments VPI grew 1.7 percent but did not perform as well as villas on an annual basis, still declining 4.8 percent when compared to Q2 last year.

Jumeirah Beach Residence, Palm Jumeirah, Downtown Dubai and the Views where the best quarterly performers.

ValuStrat said that compared to last year apartments in International City, Palm Jumeirah, Jumeirah Beach Residence, Al Furjan and Al Quoz Forth have written off their capital losses of last year.

The VPI for Dubai residential capital values has expanded to cover 95 percent of the freehold market as the city has seen new locations become established and start to influence the overall real estate performance.

Three more villa areas and five more apartment locations have been added to the fixed basket of properties that its team of valuers appraise each month.

Villa locations are Dubai Hills Estate, Mudon and Green Community (DIP) have been added while, for apartments, Dubai Silicon Oasis, Al Furjan, Dubailand Residence Complex, Town Square and Al Quoz Fourth (Al Khail Heights) have been added.

Monetary and Financial Developments in March 2021

Headline inflation increased to 1.7% in March

• Headline inflation increased to 1.7% in March (February: 0.1%).
• The main contribution to the higher headline inflation was the base effect from low domestic retail fuel prices in the corresponding period last year
  (RON95 petrol prices: March 2021: RM 2.05/ litre; March 2020: RM 1.74/litre). This base effect is expected to remain in the second quarter of 2021 and dissipate thereafter.
• Underlying inflation, as measured by core inflation, remained stable at 0.7%.

Higher IPI in February driven by manufacturing

• Overall IPI improved slightly in February to 1.5% (January: 1.2%), as higher manufacturing production more than offset further contraction in the mining production and electricity generation.
• The E&E industry recorded double-digit growth of 10.3% (January: 7.9%) driven by global demand from the tech-upcycle. Manufacturing activity was also supported by the healthcare segment, namely from rubber-based and pharmaceutical products.

Continued growth in net financing

• Net financing expanded at 4.5% reflecting the increase in outstanding corporate bond growth (March: 5.9%, February: 4.5%) and outstanding loan growth (March: 3.9%, February: 3.7%).
• Outstanding household loan growth increased to 5.7% (February: 5.1%). Higher loan disbursements were recorded for the purchase of cars and residential properties.
• For businesses, outstanding loans grew at 1.1% (February: 1.0%). During the month, higher loan disbursements and repayments were observed across most sectors and purposes.

Domestic financial markets were affected mainly by external developments

• In March, domestic financial markets were affected by external factors, particularly the rise in long-term US Treasury yields, which reached its highest level for the year at the end of the month amid higher growth and inflation expectations in the US.
• Consequently, the US dollar also strengthened which led to a broad-based weakening of other advanced and emerging market currencies against the US dollar. During the month, the ringgit depreciated by 2.6% against the US dollar while the 10-year MGS yield increased by 18.3 basis points.
• The FBM KLCI declined marginally by 0.3% as bond yields surged and investor sentiments were affected by lingering uncertainties surrounding the path of the pandemic globally and expectations for a faster US monetary policy tightening.

Ample liquidity in the banking system amid stable funding conditions

• Banking system continued to maintain healthy liquidity buffers with the liquidity coverage ratio (LCR) remaining strong in March 2021 (February: 147.1%).
• Banks’ funding profile also remained stable amid sustained strong growth in retail deposits.

Sound risk management practices by banks will support asset quality in the period ahead

• Overall gross and net impaired loans ratios were broadly sustained at 1.6% and 1.0%, respectively.
• Banks continued to set aside additional provisions against potential credit losses, which currently stand at 1.8% of total banking system loans.

Detailed Disclosure of International Reserves as at end-February 2021

In accordance with the IMF SDDS format, the detailed breakdown of international reserves provides forward-looking information on the size, composition and usability of reserves and other foreign currency assets, and the expected and potential future inflows and outflows of foreign exchange of the Federal Government and Bank Negara Malaysia over the next 12-month period.

The detailed breakdown of international reserves based on the SDDS format is shown in Tables I, II, III and IV. As shown in Table I, official reserve assets amounted to USD108,956.4 million, while other foreign currency assets amounted to USD561.2 million as at end-February 2021. As shown in Table II, for the next 12 months, the pre-determined short-term outflows of foreign currency loans, securities and deposits, which include among others, scheduled repayment of external borrowings by the Government and the maturity of foreign currency Bank Negara Interbank Bills, amounted to USD6,241.5 million. The short forward positions amounted to USD7,765.3 million while long forward positions amounted to USD535 million as at end-February 2021, reflecting the management of ringgit liquidity in the money market. In line with the practice adopted since April 2006, the data excludes projected foreign currency inflows arising from interest income and the drawdown of project loans. Projected foreign currency inflows amount to USD2,386.3 million in the next 12 months. As shown in Table III, the only contingent short-term net drain on foreign currency assets are Government guarantees of foreign currency debt due within one year, amounting to USD389.3 million. There are no foreign currency loans with embedded options, no undrawn, unconditional credit lines provided by or to other central banks, international organisations, banks and other financial institutions. Bank Negara Malaysia also does not engage in foreign currency options vis-à-vis ringgit.

Overall, the detailed breakdown of international reserves under the IMF SDDS format indicates that as at end-February 2021, Malaysia’s international reserves remain usable.