South African regulator warns of crypto exchange Binance

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The cryptocurrency exchange, Binance, has taken heat from national regulators this year. Just two days ago, the Monetary Authority of Singapore added Binance to the investor alert list. This action arose out of the stock exchange’s violation of the Singapore Payment Services Act.

Related reading | Singapore regulator says Binance unlicensed, alerts investors

The US, Thailand, UK, Malaysia, Hong Kong and Italy are some of the other countries where the stock exchange has come under scrutiny from regulators.

The latest addition to this growing list is South Africa. On Friday, September 3, 2021, South Africa’s Financial Sector Conduct Authority (FSCA) warned against Binance.

South African FSCA says Binance is unregulated

The Financial Sector Conduct Authority, in its press release, issued a public warning against the crypto exchange.

“The Financial Sector Conduct Authority (FSCA) warns the public to be careful and vigilant when dealing with BINANCE GROUP, as it is not authorized to give financial advice or provide intermediary services within the meaning of the law of 2002 on advisory and intermediation services (Financial Advisory and Intermediary Services Act, 2002). FAIS Act) in South Africa.

The statement also states that Binance is not regulated by the FSCA or any other body in South Africa. As a result, if something goes wrong, people may not get their money back and will not have the right to claim compensation.

Binance’s response to the statement

The crypto exchange was quick to respond to the FSCA press release yesterday. Basically he said he did not recognize the authority of the FSCA.

In a statement shared with Decrypt, the exchange said it does not provide financial advice or intermediary services. Binance also pointed out that the FSCA does not regulate cryptocurrencies or crypto exchanges. And because of that, it didn’t work with the FSCA. But, he “collaborated permanently with the Financial Intelligence Center (FIC)”.

Total crypto market drops slightly to $ 2.26 trillion | Source: Total Crypto Market Cap from TradingView.com

The FSCA regulates financial institutions such as banks and insurers in South Africa. It could be compared to the Securities and Exchange Commission in the United States. On the other hand, the FIC works to crack down on financial crimes such as the identification of the proceeds of crime, the fight against money laundering and the financing of terrorism.

Related reading | Binance hires former IRS investigator Greg Monahan amid regulatory woes

Binance also disagreed with the FSCA’s statement, which referred to the Binance group as an “international company located in the Seychelles.” According to the exchange, there is no “associated entity named” Binance Group “in Seychelles.” Although registered in the Cayman Islands and Seychelles, it was reluctant to name a seat. Instead, she prefers to present herself publicly as a global company.

While this ambiguity has been particularly helpful for its growth, regulators are not very happy with it.

Featured image from Fintechs.fi, chart from TradingView.com

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