Binance ends crypto trading in South Africa after FSCA’s warning

abdelaziz Fathi

 Binance, the world’s largest crypto exchange by reported turnover, said on Friday it would no longer offer derivatives products or leveraged trading in South Africa.

binance

The move comes barely two weeks after the Financial Sector Conduct Authority (FSCA)  warned that Binance is not authorized to provide financial advice or intermediary services in the country.

At the time, Binance responded to the regulators’ notice that they do not offer any such services. Head of enforcement at the FSCA also revealed that the influential crypto exchange has engaged with the watchdog to address its concerns, though the warning still stands.

Binance added in a blog post that as it constantly evaluates its product and service offerings to “remain compliant with local regulations,” it will cease the following products and offerings in South Africa:

  •         Futures
  •         Options
  •         Margin
  •         Leveraged Tokens

 With immediate effect, new users from South Africa will no longer be able to open accounts with Binance to trade futures, options and leveraged tokens. As for existing users, Binance said they will have a 90-day grace period to close their open positions. During the grace period, users will be allowed to top-up margin balances to prevent margin calls and liquidations, but they will not be able to increase or open new positions.

Binance marked its fourth anniversary this year amid a slew of regulatory actions. Authorities in Hong Kong as well as in Britain, Germany, Malaysia, Singapore, South Korea, Japan and Italy issued warnings over its cryptocurrency trading and derivatives activities. Regulators worried about consumer protection and AML checks, triggering the flight of some payment partners and institutional investors.

Despite this, CEO Changpeng Zhao said he is not worried about rival exchanges capitalizing on recent regulatory woes.  He described Binance’s ecosystem – which includes futures trading, wallets and payments service, OTC trading, and a Visa-backed credit card – as very hard to “replicate in one go.”

Binance grew from nothing to the world’s largest digital asset platform in four years, generating monthly volumes of around $2 trillion.

Recently, the exchange has been trying to upgrade its regulatory profile in Europe, having registered three more firms in Ireland within the past 10 days.

The fresh developments seemingly come as Binance seeks more licenses to undo regulatory red flags. The exchange also said it’s looking into establishing multiple headquarters and new offices in response to a slew of warnings issued in several jurisdictions this year.

CZ even raised the prospect of stepping down and confirmed that Binance was on the lookout for global executives with a strong regulatory background to help them pivot towards becoming a regulated financial institution.

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