Binance Bows to Regulatory Pressure, Halts Futures Trading in South Africa

Binance exchange, the world’s largest trading platform has announced it will cease some of its product offerings in South Africa, yielding to local regulatory demands. According to the company, South African users will no longer be able to trade Futures, Options, Margin, and Leveraged Tokens with immediate effect. 

Implications for South African Users

Per the update shared, South African users will be prevented from opening new accounts for the products listed above, while those with open positions will have exactly 90 days to close all of them. The trading platform said it will be allowing users to “top-up margin balances to prevent margin calls and liquidations, but they will not be able to increase or open new positions.”

The exchange confirmed that users will no longer be able to manually reduce or close their positions from January 6, after which all remaining open positions will be closed. This entire move follows allegations from South African regulators that Binance exchange is operating illegally in the country, a position that several market watchdogs have maintained about the trading platform in the past few months.

“Our aim is to create a sustainable ecosystem around blockchain technology and digital assets. Binance welcomes developments to our industry’s regulatory framework as they pose opportunities for the market players to have greater collaboration with the regulators. We are committed to working constructively in policy-making that seeks to benefit every user,” the exchange said in a statement.

It is yet unclear whether services such as P2P will still be available for South African users following the announcement.

Binance Exchange Regulatory Response: How Much Compromise is Too Much?

Binance is exploring all options to yield to local regulations in areas including Malaysia, Japan, Canada, and Italy amongst others where the trading platform has been flagged for operating illegally. 

The company’s Chief Executive Officer, Changpeng Zhao has maintained the position that the exchange will be focusing its resources on becoming a delight of regulators, even if it has to do with establishing regional headquarters in areas it operates in. Prior to this, Binance has also restricted its trading activities in South Korea, amongst others.

With the exchange closing its operations in some of its major markets, the question remains how much of a compromise it is willing to make in its plan for complete restructuring to become a regulatory compliant outfit.