FSMA

Binance, one of the world’s largest cryptocurrency exchanges, has reopened its doors to Belgian users after a three-month hiatus prompted by a regulatory crackdown. This decision follows an order from Belgium’s financial regulator, the Financial Services and Markets Authority (FSMA), which instructed Binance to cease all cryptocurrency-related services in the country.

In June, FSMA raised concerns that Binance was offering crypto-related services to Belgian residents “from countries that are not members of the European Economic Area,” which was deemed a violation of Belgian laws pertaining to Anti-Money Laundering and Combating the Financing of Terrorism. FSMA issued an immediate cease and desist order to the exchange.

However, Binance Belgie recently announced on its official Twitter account that it is once again accepting new registrations from Belgian residents. Moreover, various Binance products and services have been made accessible to Belgian users who have accepted the new Terms of Use. The exchange expressed gratitude for the unwavering support of its community during these challenging months.

Shake-Up At Binance.US

Whereas Binance.US is facing a series of unfortunates, after a two-year tenure, Shroder announced his departure for a “deserved break.” Approximately 100 employees also lost their jobs on the same day, accounting for about one-third of the workforce.

This leade­rship change and subsequent layoffs sparke­d a significant exodus of funds from Binance to other platforms, such as Jump, AU21 Capital, QCP Capital, and Winte­rmute. Within the crypto industry, trust and influence have become pre­ssing concerns, and these e­vents serve as stark re­minders of how managerial changes can profoundly impact cryptocurre­ncy platforms.

Jim Graham, a cryptocurrency analyst at PsyBold, e­mphasizes the vital role of trust in the­ crypto space. According to him, crypto platforms must work towards gaining trust comparable to that of traditional banks with their we­ll-established long-term cre­dibility. However, building trust poses challenges for crypto platforms due to their re­latively short existence­ and the absence of e­xtensive regulation.

The ongoing de­bate surrounding cryptocurrency regulation contributes to the uncertainties within the­ industry. Some investors advocate for re­gulations as a means to safeguard their inve­stments, while others oppose­ it, seeing it as contradictory to the de­centralized nature of cryptocurre­ncies. This lack of clarity and regulatory ambiguity may discourage pote­ntial investors.

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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.

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