Key Takeaways
- The FSMA alleges that Binance has been offering these services in Belgium while violating the country’s laws on Anti-Money Laundering.
- FSMA claims that Binance failed to provide satisfactory answers that would clarify the nature/extent of the services provided by its associated entities.
In a recent development, the Financial Services and Markets Authority (FSMA) of Belgium has issued an order to Binance, one of the world’s largest cryptocurrency exchanges, demanding the cessation of its cryptocurrency exchange and custody wallet services. The FSMA alleges that Binance has been offering these services in Belgium while violating the country’s laws on Anti-Money Laundering (AML) and Combating the Financing of Terrorism.
According to the FSMA’s notice dated June 23, Binance’s provision of crypto-related services from non-European Economic Area (EEA) countries is in violation of the applicable regulations. The regulator has stated that Binance is facilitating exchange services between virtual currencies and legal currencies, as well as offering custody wallet services from countries that do not fall within the purview of the EEA.
The FSMA has taken this action based on the belief that Binance’s operations, which reportedly include control over approximately 19 companies outside of the EEA, needed to be adequately disclosed to Belgian users in the terms and conditions when signing up for services. Despite several requests for information, the FSMA claims that Binance needed to provide satisfactory answers that would clarify the nature and extent of the services provided by its associated entities.
Consequently, the FSMA has ordered Binance to immediately cease all such services in Belgium. As part of the order, Binance is required to initiate contact with its Belgian clients and return all cryptocurrencies and private keys held by the exchange. The FSMA insists that Binance should ensure the secure transfer of these assets either directly to the clients or to entities governed by the law of an EEA member state.
The latest development comes amid Binance facing increasing regulatory scrutiny. Earlier this month, the United States Securities and Exchange Commission (SEC) filed a lawsuit against Binance, alleging that the exchange worked to subvert “their own controls” to allow high-net-worth U.S. investors and customers to continue trading on Binance’s unregulated international exchange.
