Binance Moving to Malta - Island Nation Known for Tax Evasion and Money Laundering
The Good
In remarks made by Binance CEO Zhao Changpeng, he praised Malta's favorable climate for cryptocurrencies stating:
Malta is very progressive when it comes to crypto and fintech.
Zhao also noted that he'd been recently invited by the Maltese government to examine a bill in the works that is crypto-friendly. Furthermore, he stated that Binance was on the verge of securing a deal with local banks that would provide access to deposits and withdrawals.
Since Binance currently trades exclusively in cryptocurrencies and tokens, having access to fiat currency is another huge draw for the world's most popular crypto-exchange.
The Maltese government's newly created, Digital Innovation Authority, has emerged in coordination with new
legislation to provide legal certainty in the sphere of Blockchain technology and by extension cryptocurrencies.
Step one deals with setting up the authority, step two deals with launching a Bill that will set out the regime for the registration of Technology Service Providers and the certification of Technology Arrangements. Lastly, step three will launch a Bill that will set out the framework for Initial Coin Offerings (ICOs) and the regulatory regime on to the provision of certain services in relation to virtual currencies.
-Silvio Schembri, Parliamentary Secretary for the Digital Economy
The Digital Innovation Authority aims at providing stability in a volatile and uncertain marketplace.
Government has launched a policy document which seeks to set up the Malta Digital Innovation Authority alongside other legislation to provide legal certainty in the sphere of Blockchain technology and by extension cryptocurrencies.
With a focus on making Malta a blockchain technology trailblazer, one of the main focuses of the government initiative is to make financial dealings more efficient, reliable and cost effective.
The Prime Minister of Malta, Joseph Muscat, also spoke positively about plans to make Malta a global pioneer for blockchain technology in the years ahead.
They are coming to our country because we have a regulatory system which is the first of its kind, and I guarantee that it will be the best in the world.”
Binance's decision to set up shop in Malta makes sense for the company as governments continue to crackdown on crypto-exchanges, ICOs and cryptocurrencies from the US to China. Having a crypto-positive country with regulations designed to support the industry is hard to come by and an opportunity even harder to pass up.
The Bad
The regulatory system that Prime Minister Muscat speaks of so glowingly is also notorious for its capacity to facilitate tax evasion and money laundering.
The gaming industry, specifically online gaming, has become an economic boon for the country generating 12% of the county's GDP. Consequently, billions of dollars in revenues has also attracted the attention of Italian Mafia clans, such as the 'Ndrangheta' (Calabrian Mafia), who operated a $2 billion money laundering operation through Maltese registered companies in 2013. In addition, separate Italian Mafia clans have plotted to infiltrate multiple Maltese gaming companies.
Authorities in Malta and the EU have tightened regulations in response to the increased activities of organized crime on the island.
Just last week five Italian gambling companies exited the country after an investigation by the Malta Gaming Authority and Italian police into illegal betting shops associated with the Mafia. One business had its licence cancelled, one suspended and the other three terminated their own contracts to avoid further scrutiny.
This may be a good sign for the Maltese but corruption on the Island goes well beyond organized crime, the Prime Minister and several of his cabinet members have been at the center of corruption allegations for years. Notably, the tireless efforts of slain journalist Daphne Caruana Galizia in exposing the deep seeded corruption in the Maltese government in the months leading up to the car bombing and targeted killing.
The Ugly
Before her assassination in October 2017, Galizia lead the Maltese investigation into the Panama Papers which implicated Joseph Muscat's closest advisor and a top ranking minister in his government. Muscat's chief of staff Keith Schembri allegedly established several shell companies in off-shore tax havens just after Muscat took office in 2013.
The current tourism minister, Konrad Mizzi, is also named in the Panama Papers because of his connections to several shell companies as well, chief among them Hearnville Inc, in connection to Nexia BT. Mizzi has been accused of siphoning more than 130,000 euros of public funds to private accounts.
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These three government officials were at the heart of Galizia's quest exposing deep rooted corruption in the Maltese political system. Galizia made many enemies with her political blog Running Commentary and the majority of the Maltese people believe that she was targeted because of her fearless work. Galizia also was simultaneously investigating links between organized crime and the gaming industry. Almost 6 months after her murder, Daphne's killer(s) have not been brought to justice. Several arrests were made in early 2018 but the Galizia family believes the men are low-level patsies. None of those arrested were the subject of Daphne's investigative journalism.
To make matters worse, Daphne Caruana Galizia is still being attacked months after her death. At least 32 libel suits brought by financial backer, Silvio Debono, of the ruling Labour Party as well has lawsuits filed by Konrad Mizzi and even the PM Muscat continue to move forward posthumously. The intention is clear, to wipe out Galazia's work, to discredit her claims and expunge her memory from existence.
Related Posts
https://steemit.com/journalism/@v4vapid/real-journalism-gets-you-killed-the-murder-of-panama-papers-journalist-daphne-caruana-galizia
Binance in Malta
While most will eagerly welcome Binance's move to Malta, there are some real concerns here for the crypto-community.
The history of money laundering as it relates to online activity in the gaming industry is troublesome as crypto detractors have continuously attempted to associate crypto with money laundering. Also, the deep corruption of the political system and the presence of organized crime in the gaming industry is equally worrisome.
I've been actively researching Malta's corruption for several weeks now, if you'd like to know more please read my previous posts and keep an eye out for more I hope to release in the coming days and weeks.
I addressed this exact same topic in my most recent post.
See it:
Money laundering and "state backed" coins like Venezuela's Petro could be partially responsible for crypto bear market.
This welcoming of money laundering and corruption in my opinion is very bad marketing at the very least and dangerous at the worst. Why would Binance make such a damning move during a time when the Petro (state backed token) is being launched and crypto ads are being banned on Twitter?
If anything the push should be toward increasing legitimacy for crypto exchanges not for this. Money laundering is what is keeping institutional investment out. It could be single handedly the cause of the current crash because if all the institutional capital pulled out then it would explain at least some of the drop. The fact that the SEC doesn't want to approve certain things due to the unregulated nature, the fact that the IRS is embracing ambiguity, Binance doing that only adds more fuel to the fire.
Thanks for your comments, much appreciated. I can see why Binance would want to move somewhere more supportive of crypto that offers some measure of stability but Malta is very very corrupt. Actually, the extent of the corruption is mind numbing, I just pointed to a few examples here.
From what I hear, Binance is very open and transparent about their operations but the power of organized crime in that part of the world should not be underestimated as I'm sure their keen to find ways to exploit crypto in the same ways as they did with online gaming.
I agree that from a marketing perspective, it would be wise to try to stay clear of any association with money laundering of course, as we know that it's often used in the fear-mongering around cryptos.
I did also read that Binance is looking to transform their business into a 'decentralize exchange', and I thought that was a least some positive news.
A decentralized exchange is good but has pros and cons. One of the cons is you will not get institutional money to flow into it. So liquidity could be a problem.
I'm confused a little bit. Is not the goal of the Crypto Community to have the currency be a solution or complete work around to the already manipulated and very controlled financial and govt system? Effectively removing consent from the system of enslavement they have installed? If so why then would anyone either expect, OR desire to have the approval of these entities? If they approve of Crypto it would seem to me that implies it is something that is helping them to retain control of the world. I'm pretty new as far as involvement with this because I assumed (perhaps like a dummy, lol) when bitcoin launched years ago that they were going to figure out a way to shut it down quickly unless they were behind it in some way.
The crypto community is not static. In order for it to grow it has to embrace the values of the world it is in. The SEC is not the only possible provider of safety. Self regulation is possible and preferred.
Tax evasion and money laundering are a matter of perspective. One man's terrorist is another man's freedom-fighter.
That's not good. The appearance of impropriety is often worse than impropriety. Markets are no exception to this rule.
I would rather it be centered in some humane place, but the humane places seem to be rather strict on how currency functions.
Thanks for highlighting this move. I'll have to keep my eye on it.
Where would be the ideal place for a company like Binance to relocate?
What is Iceland's position on Crypto?
That's a great question but to be completely honest I don't know which country strikes the right balance in terms of policy and regulations. I'd like to know the answer myself. It's probably too early to tell as most countries are trying to figure out how to handle the arrival of cryptos and blockchain tech. Maybe a big reason why the Maltese are jumping at the chance to get out ahead of the pack in an attempt to attract new industry and more investment in their economy.
Is there any effective or desirable policy other than hands off at this point in time?
I was impressed by Iceland in 2008 and with the Domestic Surveillance shit shortly thereafter. They seemed like a real straight shooting polity on the issues of the day. Banksters went down there. Yay!
I heard some alternate realities on Iceland's public policy, and they were not all muffins and cotton candy as it sounded from the pro-human blogosphere at the time.
So I have no idea what they're deal is, but it seems like they'd be cool with it.
Good information and perspective. I have a binance account, and have a couple pennies there. On the surface, I'm happy they're making a move to give themselves more freedom. Under the surface is where the scary things swim.
And then, ah yes, with more freedom comes more corruption by those willing to take advantage of those freedoms and use it to help themselves.
It's a double-edged sword. We want freedom for ourselves, but don't want others to take advantage of that freedom for their own benefits...yet we'd probably do much the same if we could.
Your information gathering is superb, and at least the rest of us can choose to use Binance or not with eyes wide open.
An exchange which holds other people's money has no moral or reasonable justification to desire more freedom. More freedom to do what exactly? Bitconnect had that kind of freedom and see what happened?
It's not necessarily more freedom to DO a certain thing; sometimes it is freedom FROM certain things. If crypto suddenly became illegal (as an extreme example) I'd want my exchanges to be in a place where legality could not touch it.
If crypto became illegal here? If its illegal in one country and not another then Binance could move corporate headquarters. My point is why should we trust a centralized exchange which is supposed to be regulated and trying to attract the big pocket customers when it moves to a country which has a questionable reputation in finance? I just think from a marketing and PR perspective the move is senseless.
If crypto suddenly became illegal everywhere or in the US for example then I would think it's very stupid to then trust a foreign country and centralized foreign exchange with your money. If the company goes to a specific country specifically to avoid legal consequences then I would be wondering what that company has to hide that it would do that rather than strive for compliance?
It seems to me that blockchain technology can be both hyper anonymized and hyper transparent and I honestly haven't figured out which is its greater strength. Which makes this situation in Malta both puzzling and fascinating to me.
Yes, it's hard to know what to think about the move to Malta. In a way I feel like I'm raining on people's parade, especially since the markets have been in a slump lately. But, I've been examining Malta for quite some time now and thought I should point out the endemic corruption in that country.
I'm having real trouble with this transparent/private dichotomy.
I'm far more OK with my interactions online being public than I am having them sucked up, warehoused in some yuge data silo, and experimented on. I'm thorny and loud when it comes to politics and I had a very successful guerrilla piece on Social Security that was picked up as a PR front by DFA, AARP, and some large unions. Shuttered up the Privatization of Social Security Scam on the strength of a blog post. Score 1 for the little guy. I don't want shit hanging out in the shadows to be dropped on unsuspecting citizens for social control.
My point is that I'd rather have all that shit out in public; my uncomfy Leftist commentary has and will cost me business. It's kind of how I'm rolling right now. k9disc... that's me pretty much everywhere.
Anyway... great point about the transparency/privacy thing. I'm struggling with it. I'm also having a problem with the split between the libertarian and monetarists concept of currency, value, and markets.
I'm a strong proponent of regulated markets. But it's kind of like the private/transparent thing. I want privacy, but I'll take transparency and public access in lieu of corporate exploitation and profiteering. I want well regulated markets, and a well regulated economy, but I'll take a non-rigged economy over what we've got now any day.
peace~
An interesting turn of events and well explained here. It's a bit unsettling with even the best of exchanges between the hacks/constant threats of hacks, looming regulations and licensing issues and the general looseness characteristic of crypo based companies. I trust Binance for the most part, but even they leave things to be desired...
The worst thing an exchange can do if centralized is to try to avoid regulations. All centralized exchanges should embrace regulators or who the hell needs them? If they aren't trying to be regulated then the offer the user no advantage over a decentralized exchange.
I agree but also disagree. So the absolutely agree they should be regulated.
But a broker's whole point of existence is to offer liquidity to the markets they serve, and Binance does that job as well as or better than most of it's competitors.
It would be great if decentralized exchanges could support all the trading activity, variety of coins / tokens and volume that centralized exchanges do, but they do not and will not for the forseeable future. Not only that, it takes a whole process of reorientation away from the centralized services mindset that we're all mostly entrenched in. That will take years if not a least a decade or longer to get enough people on board in order to decrease such reliance on centralized systems....
Hoping to see where this leads. Heard of Malta and it's "treachery" in money laundering.
It might still just be due to weird coincidence as well or simply due to circumstance that could not be avoided.
Or still yet, Binance may be on the verge of becoming something bigger in the "not good" sense.
Do well to keep us updated @v4vapid
good job by binnance
Surely this is good news, might have coinbase a bit worried, cheers mike
Well, I actually like Binance.
Binance is the first ever exchange where I bought my Ripple :D
Ripple is a bankster coin... when it peaks dump and buy something legit (I'm liking BNB right now with this news)
Haha okay :)