Binance tells South African regulator it has no jurisdiction over crypto

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In short, Binance has taken the heat from national regulators this year. South Africa is the latest country to warn investors of the exchange.

South Africa’s Financial Sector Conduct Authority (FSCA) on Friday issued a public warning that Binance Group, owner of the world’s largest cryptocurrency exchange, is “not authorized to give financial advice or provide intermediary services in terms of financial advice and intermediary. Services Act. “

To which Binance quickly responded: We do not recognize your authority anyway.

In a statement shared with Decrypt, the exchange said it does not provide financial advice or intermediary services. He then pointed out something described in FSCA’s own letter: FSCA does not regulate cryptocurrencies or crypto exchanges.

For this reason, he did not work with the FSCA but “collaborated permanently with the FIC (Financial Intelligence Center)”.

The FSCA regulates financial institutions such as banks and insurers in Africa’s second-largest economy, with the dual objective of maintaining fairness in markets and protecting consumers, like the Securities and Exchange Commission of United States. such as terrorist financing and money laundering. Its closest corollary in the United States is FinCEN, the Financial Crimes Enforcement Network.

Binance also chose nits in the FSCA statement, which qualifies the Binance group as an “international company located in Seychelles.” According to Binance, there is no “associated entity named ‘Binance Group’ in Seychelles.” A February 2020 report from Decrypt revealed that Binance was registered in the Cayman Islands and the Seychelles, although Binance was reluctant to name a head office, preferring instead to present itself publicly as a global company.

This does not suit country regulators. The U.S. Commodity Futures Trading Commission was investigating the exchange to see if it allowed U.S. residents to use its service, which is not registered in the country. The Department of Justice and the Internal Revenue Service have also reportedly opened an investigation into Binance’s activities.

Binance has not been charged with any wrongdoing, but it has felt the consequences. In August, it announced more stringent KYC requirements for users to verify their identity. Brian Brooks, CEO of Binance US, is also said to have left the exchange due to differences of opinion over how his affiliate should handle US regulators.

The exchange has also taken heat from central banks and securities regulators in recent months. Just two days ago, the Monetary Authority of Singapore (MAS) placed Binance.com on its investor alert list, advising residents of the country that the global stock exchange is not regulated or licensed by the MAS. . The notice did not mention the Singapore-specific Binance.sg platform. MAS previously told Decrypt that Binance Asia Services, which is registered in Singapore, is not licensed.

The UK, Italy, the Netherlands, Japan and Malaysia have all issued similar warnings about Binance or the conglomerate’s existing or proposed weapons in recent months. None of them has shaken his grip on trade. In the past 24 hours, Binance has processed $ 30.2 billion in trading volume. Its closest competitor, Coinbase, managed just $ 5.5 billion.

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