- Belgium’s financial authority ordered Binance to cease all its operations immediately
- The exchange is also required to return customers their assets
Binance – the world’s largest crypto exchange by trade volume – continues to be in troubled waters with regulators around the globe. In the latest developments, the Belgium Financial Services and Markets Authority [FSMA] has ordered Binance to stop its operations in the country immediately. In a notice released today, the authority stated that the exchange failed to comply with the law of the nation.
Additionally, the regulator stated that failure to comply with its law could subject the firm to criminal sanctions. And, the case would fall under its Anti-money Laundering and Terror Financing Act. As per the press release, the law states,
“Persons or firms governed by the law of a country that is not a member of the European Economic Area are prohibited from offering or providing, within Belgium, by way of a professional activity – even if supplementary or ancillary – exchange services between virtual currencies and legal currencies or custody wallet services”
Binance fails to provide the details of its operations
With this, the crypto entity cannot provide any exchange, fiat to crypto, and custody services in the region. Moreover, FSMA stated that the services provided by Binance Operators were “not otherwise identified”. There were 27 Binance entities providing the same services, out of which 19 were located outside of the EEA.
The regulator stated that Binance “has not been able to demonstrate to the requisite legal standard”. It added that the crypto entity did not prove that its crypto services in Belgium were from an EEA-based entity. Binance also did not prove that its operations were “authorized, based on their domestic law, to provide such services in Belgium”
Furthermore, Binance has to also return Belgium users their cryptocurrencies. Otherwise, it has to transfer their assets to other crypto service providers governed by the EEA member state. It added that “The Crown Prosecutor of Brussels has been informed of the acts that are liable to constitute a criminal offence.”
Notably, this regulatory action comes at the height of tensions between the crypto exchange and the US regulator – the Securities and Exchanges Commission [SEC]. The exchange’s American wing had a minor win against the regulator when the court deemed that it would not freeze all of its assets per the SEC’s wishes. Moreover, the commission also admitted to having no proof of the exchange comingling customer assets.
