Binance Banned from Belgium, Effective Immediately
The world’s largest crypto exchange by trading volume, Binance, is in trouble with regulators around the world. In recent developments, the Belgian Financial Services and Markets Authority [FSMA] has ordered Binance to halt its operations in the country immediately.
In a notice released today, the authority noted that Binance breached the nation’s law. Specifically, the FSMA claims that Binance has been providing exchange services between digital and fiat currencies, as well as custodial wallet services, from countries outside of the European Economic Area (EEA), in violation of Belgian laws:
“Despite several requests for information made to Binance, the latter has not been able to demonstrate to the required legal standard that the legal entities that carry out the services of the type mentioned above in Belgium are based in the European Economic Area and are authorized, on the basis of its national law, to provide such services in Belgium.”
Binance Transgression in Belgium
Binance has been offering exchange services between digital and fiat currencies in Belgium without legal authorization, which is illegal under Belgian financial regulations. Despite several opportunities to demonstrate compliance with legal requirements, Binance has reportedly failed to do so.
The FSMA decision banning Binance from all activities in the country takes effect immediately on June 23.
“Binance does not deny that it offers such services in Belgium.” However, the entities providing these services are largely unknown, as 19 of the 27 companies involved are based outside of the EEA:
“These services appear to be provided by Binance Operators not otherwise identified in such contractual terms and conditions.”
Binance Does Not Provide Trading Details
With this, the crypto entity cannot provide any exchange, fiat to crypto, and custody services in the region. Furthermore, FSMA stated that the services provided by Binance traders were “not otherwise identified”. There were 27 Binance entities providing the same services, of which 19 were located outside of the EEA.
The regulator stated that Binance “has failed to demonstrate the required legal standard.” It added that the crypto entity did not prove that its crypto services in Belgium were from an entity based in the EEA. Binance also failed to prove that its operations were “authorized, based on its national law, to provide such services in Belgium.”
The FSMA has also required that Binance immediately initiate steps to return all crypto keys and digital currencies on behalf of Belgian clients or transfer these assets to entities within the EEA authorized to conduct their crypto and custodial activities.
In this regard, the regulator noted that “The Brussels Crown Prosecutor has been informed of acts that may constitute a criminal offense.”
On the other hand, the regulator indicated that non-compliance with its law could subject the company to criminal sanctions. And, the case would fall under its Law Against Money Laundering and the Financing of Terrorism.
Such regulatory action comes at the height of tensions between the crypto exchange and the US regulator – the Securities and Exchange Commission. [SEQ].
The US wing of the exchange scored a minor victory against the regulator when the court ruled that it would not freeze all of its assets in accordance with the SEC’s wishes.
Furthermore, the commission also admitted that it had no evidence that the exchange commingled client assets.
By Marina Meza
