The Belgian Financial Services and Markets Authority (FSMA) has taken decisive action against cryptocurrency exchange giant Binance.
The FSMA has ordered Binance to immediately halt all virtual currency services in Belgium, citing potential criminal offenses. The Crown Prosecutor of Brussels has been duly informed of the acts that may constitute a breach of the law.
Binance’s Violation: Offering Services From Non-European Economic Area
The FSMA’s press release clarifies that Binance has been providing exchange services between virtual currencies and legal currencies, as well as custody wallet services, in Belgium, utilizing countries outside the European Economic Area.
This flagrant violation prompted the FSMA to demand an immediate cessation of such activities within Belgian territory.
The prohibition explicitly prohibits individuals and entities subject to the laws of non-European Economic Area countries from offering or providing professional exchange services or custody wallet services within Belgium.
Failure to comply with this ban carries severe criminal penalties, as outlined in Article 136 of the Belgian Law on preventing money laundering and terrorist financing.
The FSMA argues that Binance’s offerings in Belgium from non-European Economic Area countries violate this prohibition.
Consequently, in a decision made on June 23, 2023, the FSMA ordered Binance to cease all exchange services involving virtual currencies, legal currencies, and custody wallet services in Belgium.
The exchange, while acknowledging that it offers these services in Belgium, fails to identify the specific Binance Operators responsible for providing them.
An astounding 27 companies, 19 of which are based outside the European Economic Area, seem to be involved in the operational and technical aspects of these services.
Despite repeated requests for clarification, Binance has been unable to furnish sufficient evidence that these services in Belgium are being carried out by legal entities governed by the laws of another European Economic Area member state duly authorized to operate in Belgium.
In addition to the immediate cessation of operations, the FSMA has demanded that Binance contact its affected Belgian clients and promptly return all cryptographic keys and virtual currencies held on their behalf.
Alternatively, Binance may transfer these assets to entities authorized by their domestic laws within the European Economic Area while ensuring the utmost security.
However, as the industry eagerly awaits more comprehensive regulations, the FSMA advises consumers to remain cautious and heed the warnings issued by national and European supervisory bodies regarding the risks associated with virtual currencies.
Related Reading | SEC Agree To Waive BlockFi’s $30M Fine On One Condition
