The financial markets regulator in Belgium, the Financial Services and Markets Authority (FSMA), has issued an order to Binance, one of the world’s largest cryptocurrency exchanges, to cease offering its crypto services in the country.
This decision came after a thorough assessment by the FSMA regarding Binance exchange’s compliance with Belgian regulations.
Binance Exchange’s Operation in Belgium is Illegal
According to the release, Binance has been operating in Belgium without obtaining proper authorization from the FSMA, which is a legal requirement for all financial entities. The regulator alleges that Binance has been providing its services from countries outside the European Economic Area (EEA), which is contrary to its laws, and that Binance has failed to seize opportunities to prove its compliance with required regulations.
As a result, the Belgian regulator ordered that the exchange immediately halt all its activities concerning cryptocurrencies. These include trading, buying, selling, and offering any type of financial advice or related services.
Additionally, the regulator ordered Binance to return all cryptographic keys and/or all virtual currencies that it holds on behalf of Belgian users or carefully transfer all required assets and documentation to any other entity that services the Belgian market under its prescribed laws.
FSMA Faults Binance for Transparency
Meanwhile, the financial market regulator has expressed concerns about the lack of transparency in Binance’s operations, particularly regarding the exchange’s identification and verification procedures for its users. In addition, it also found that Binance had failed to provide adequate information about the risks associated with investing in cryptocurrencies, such as the possibility of fraudulent activities and the potential loss of funds.
Binance Kicked out of Other Countries
However, the non-compliance of Binance with Belgian regulations is not unique. The exchange has faced similar issues in other countries, including the UK and Japan, where regulators have also ordered the company to cease operations unless they comply with local laws and regulations.
Recently, the US SEC filed over a dozen charges against the exchange and its CEO Changpeng ‘CZ’ Zhao for blatantly disregarding American laws.
Interestingly, the FSMA’s decision highlights the importance of regulatory compliance within the cryptocurrency industry. While cryptocurrencies remain largely unregulated in many jurisdictions, this trend is changing rapidly, as governments and regulators seek to protect consumers and prevent illicit activities.