Weeks go by and they look the same for Binance. Indeed, not a week goes by without a regulator questioning the exchange. After the warning issued by the Monetary Authority of Singapore (AMS), it is now South Africa that is cracking down on Binance. Nevertheless, the repeated attacks against the number 1 cryptocurrency trader do not seem to affect Bitcoin (BTC) and the rest of the market too much.
Yet another warning against Binance
South Africa’s Financial Sector Conduct Authority (FSCA) has issued a public warning against Binance. In a statement dated September 3, the FSCA said that the Binance Group, an “international company”, was not licensed to provide financial services in the country. By way of background, the Binance Group has two headquarters: one in the Cayman Islands and the other in the Seychelles.
“The Financial Sector Conduct Authority (FSCA) urges the public to be cautious and vigilant, when dealing with the BINANCE GROUP, as it is not licensed to provide financial advice or intermediary services under the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act) in South Africa.”FSCA press release
In its message, the FSCA says South Africans were using a Telegram group to access Binance’s services. Along with the warning to Binance, the authority reminds that investments in digital assets are not regulated in the country:
“Therefore, if something goes wrong, it is unlikely that you will get your money back and you will have no recourse against anyone.”FSCA press release
Finally, the FSCA urges the public to check the status of entities operating in the financial ecosystem.
“We do not recognize your authority.”
Shortly after the warning was issued, Binance, in turn, shared a statement. First of all, the exchange points out that the FSCA does not have the authority to regulate investments in digital assets. Indeed, Binance already works with the Financial Intelligence Centre (FIC), which would be the appropriate regulator. Therefore, Binance contacted the FSCA to understand the warning and put the concerns to rest:
“Binance.com is registered with the FIC as a voluntary reporting institution […] Binance complies with the FIC’s obligations relating to establishing and verifying the identity of customers, maintaining records and reporting suspicious or unusual transactions.”Binance release
On the subject of the FSCA’s jurisdiction, Binance is right on target. The FSCA’s mission is to supervise financial institutions with the dual goals of maintaining fairness in the marketplace and protecting consumers. Thus, the FSCA can only act against Binance if the exchange jeopardizes the safety of consumers; hence the argument that the exchange is providing investment advice.
Regarding the Telegram group, Binance also denies the accusations. The Binance South Africa Telegram community is said to be an educational group on which the exchange makes its announcements. In any case, the group does not provide financial advice, as accused by the FSCA.
Finally, according to Binance, there is “no entity named Binance Group in the Seychelles. Several sources confirm that Binance is registered in the Cayman Islands and the Seychelles. However, the exchange prefers to present itself as a global company. In any case, this attitude does not please the regulators who are cracking down on the exchange relentlessly. Binance has not been accused of any wrongdoing, but it has felt the consequences of regulatory pressure. So, last August, it announced a tightening of KYC requirements for users as a precaution.