South Africa Regulator Warns Against Crypto Exchange Binance

South Africa Regulator Warns Against Crypto Exchange Binance

Cryptocurrency exchange, Binance, has been taking heat from national regulators this year. Just two days ago, the Monetary Authority of Singapore added Binance to the investor alert list. This action was a result of the exchange’s breach of the Payments Services Act in Singapore.

The U.S., Thailand, U.K., Malaysia, Hong Kong, and Italy are some of the other countries where the exchange has drawn scrutiny from regulators.

The latest addition to this growing list is South Africa. On Friday, Sept. 3rd, 2021, the Financial Sector Conduct Authority (FSCA) of South Africa warned against Binance.

South Africa’s FSCA Says Binance Not Regulated

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 cautious and vigilant when dealing with BINANCE GROUP as they are not authorized to give any financial advice or render any intermediary services in terms of the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act) in South Africa.”

The statement also said 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 have no right to demand compensation.

Binance’s Response To The Statement

The crypto exchange was quick to respond to the FSCA’s press release yesterday. Basically, it said that it does 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 this, it hasn’t worked with the FSCA. But, it has been “continuously collaborating with the Financial Intelligence Centre (FIC).”

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 U.S. On the other hand, the FIC works to repress financial crimes such as identifying the proceeds of crime, combating money laundering, and financing terrorism.

Binance also disagreed with the FSCA’s statement, which referred to Binance Group as “an international company situated in Seychelles.” According to the exchange, there is no “associated entity named ‘Binance Group’ in Seychelles.” Although registered in the Cayman Islands and Seychelles, it has been hesitant to name a headquarters. Instead, it prefers to present itself publicly as a global company.

While this ambiguity has been particularly helpful for its growth, regulators are not that pleased.

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