Binance is not licensed to operate in South Africa
For Binance, the past three months have been difficult. Since the British authorities decided to ban the local version of Binance, several countries have followed the trend by taking more or less restrictive measures. After Japan, Italy and Singapore, it is South Africa’s turn to attack the exchange platform.
In a statement released last Friday, the Financial Sector Conduct Authority (FSCA, the local AMF) warns that Binance, “an international company based in Seychelles”, is not authorized to give financial advice or provide services intermediation in the territory.
Without pronouncing any regulation, the regulatory authority encourages all South African residents to be “careful and vigilant”.
According to the FSCA, Binance users in the country can register on the platform through a Telegram group. The South African financial authority recalls that these people run many risks by using Binance or any platform that does not have a license. On the other hand, it does not mention the possibility of a future blockage.
👉 Read – Binance Temporarily Suspends Deposits Via European Bank Transfer (SEPA)
Binance timidly responded to South African regulator
A Binance spokesperson responded to the FSCA warning by simply believing that the Chinese-born platform does not offer financial advice or provide intermediation services. As for the Telegram group, it would only serve to promote blockchain technology.
This response is a bit timid, as the South African regulator is far from the first to reframe Binance, accused of operating without authorization in many countries. These warnings or prohibitions do not affect, or very little, the other major exchanges, generally based in the United States.
Changpeng Zhao, CEO and founder of Binance, recalled in July that he did not want the platform to operate without authorization and therefore illegally. Rather, he would like Binance to discuss with all regulators and for the platform to be in compliance with all the laws of the countries in which it has clients.
👉 To read – Binance: Changpeng Zhao plays the appeasement card with the regulators
The FSCA recalls that cryptocurrencies are not regulated
In South Africa, more and more people are using cryptocurrency. However, the FSCA recalls that they are not subject to any regulation. As there are still a few years in Europe, the local authorities specify that in some cases there is no way to recover the invested money that has been lost or stolen by hackers.
The FSCA took the opportunity to recall that an authorization and a special license were necessary in order to offer financial services in the country. The regulator accuses Binance of exceeding this authorization requirement by going through a Telegram group.
Last June, the central bank of South Africa ordered the legislator to regulate cryptocurrencies in a progressive and structured way. This regulation would rather aim to regulate the use of digital assets and not to prohibit them.
👉 To read – South Africa calls for progressive and structured regulation of cryptocurrencies
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About the author: Benjamin Allouch
Formerly a lawyer specializing in personal data and digital law, I quickly became interested in Bitcoin, blockchain technology and their legal implications. I am now an independent consultant and writer in the field of cryptocurrencies and blockchain.
All articles by Benjamin Allouch.