You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

FSCA’s warning on Binance is the latest salvo against crypto operators

Binance, the world’s largest crypto exchange, has come under regulatory scrutiny in several countries.
The company says the notice was ‘perhaps a precautionary move’ and more of ‘a warning that crypto is not regulated’. Image: Darrin Zammit Lupi/Reuters

Earlier this month the Financial Sector Conduct Authority (FSCA) warned the public to be cautious in dealing with Binance, the world’s largest crypto exchange.

This follows similar warnings in the UK, Japan and Canada.

Head of enforcement at the FSCA, Brandon Topham, says Binance has engaged with the FSCA with a view to addressing the concerns raised by the regulator, though the warning still stands.

“Our concern is that Binance is offering products to South Africans for which you need a licence from the FSCA, and here we are talking about financial products such as derivatives rather than cryptos – which are unregulated.”

The notice says the FSCA received information that Binance Group, situated in Seychelles (which Binance disputes*) has a Telegram group that South Africans can join to gain access to the crypto exchange.

Read: FSCA suspends ZAR X’s exchange licence

“The FSCA would like [to] caution that in addition to this entity not being authorised to provide any financial services or business, crypto-related investments are currently not regulated by the FSCA or any other body in South Africa. As a result, if something goes wrong, you’re unlikely to get your money back and will have no recourse against anyone,” says the FSCA notice.

The regulator says Binance is not authorised to give financial advice or intermediary services in SA in terms of the Financial Advisory and Intermediary Services (Fais) Act.

Read:

Binance grew from nothing to the world’s largest crypto exchange in four years, generating daily volumes of around $2 billion. The exchange was established in 2017 by Chaopeng Zhang, a Chinese-Canadian coder also known as CZ, who previously worked at the Tokyo Stock Exchange and Bloomberg. He also spent time as an employee of McDonald’s. According to Forbes, his net worth is around $1.9 billion, virtually all of this in the form of cryptocurrencies.

Binance timed its entry to the market in 2017 to coincide with a huge upswing in crypto adoption.

While initially limiting its offering to cryptos, it later diversified into trading forex pairs and a range of derivatives, and this is what appears to have brought it unwanted attention from regulators.

It recently announced that it would discontinue certain services in Singapore after falling under regulatory scrutiny there.

Binance says it is working with regulators across the globe to ensure it remains compliant.

Brenton Naicker, business development manager for Binance Africa, says the company has been in contact with the regulator, and the notice issued by it was perhaps a precautionary move and “was more a warning that crypto is not regulated – with specific reference to us.” The reasons for the FSCA warning were explained to customers, and has not had a negative impact on the business.

In response to the FSCA warning, Binance issued the following statement:

“We are aware of the notice published by the South Africa FSCA on September 3. At the outset, we would like to take this opportunity to clarify that Binance.com does not provide financial advice or render any intermediary services. We have clearly set this out in our terms of use, which can be found here at: https://www.binance.com/en/terms.

As the FSCA stated in its notice, cryptocurrency-related activities are currently not regulated by it or any other body in South Africa. In order to bridge the gap and to uphold our commitment to protecting our users, Binance.com has set stringent and industry-first standards. For example, Binance.com has recently implemented the Intermediate Verification requirement for all users which supports Binance’s Know Your Customer (KYC) and Anti-Money Laundering (AML) efforts. In addition, to ensure that our users are as protected as possible, since 2018, Binance.com has implemented a Secure Asset Fund for Users (SAFU) where we allocate 10% of all trading fees received into it to offer protection to our users and their funds in extreme cases.

Furthermore, Binance.com is committed to taking a collaborative approach in working with regulators and law enforcement globally, and in particular, Binance.com is continuously collaborating with the FIC (Financial Intelligence Centre), the major regulator of financial crimes in South Africa. Binance.com is registered with the FIC as a voluntary self-disclosure institution. As a member of this programme, Binance complies with the FIC Act obligations relating to establishing and verifying of clients’ identities, record keeping and reporting suspicious or unusual transactions in terms of section 29 of the FIC Act.

In the course of 2021 to date, Binance.com has collaborated with the FIC on over 462 cases, and in turn, we understand that the FIC collaborates with the FSCA for further investigations when necessary. We have reached out to the FSCA for more clarification on their statement and look forward to working with them and addressing any concerns they may have.

In terms of social media outreach, we have an official Binance South Africa Telegram community which promotes blockchain education and community announcements.

*It is not intended, nor does it provide any financial advice. This community is moderated by staff, admins and Binance ‘angels’. For completeness, we would also clarify that we do not have an associated entity named Binance Group in Seychelles.”

Please consider contributing as little as R20 in appreciation of our quality independent financial journalism.

AUTHOR PROFILE

COMMENTS   11

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

Since Bitcoin is a Ponzi scheme / scam that is bound to collapse, any “exchange” built upon Bitcoin, must, by definition, be a scam that will eventually collapse as well. But by then all the people who started the exchange will have made their money, cashed out, and will be living on a beach in the Virgin Islands while those stupid enough to invest in cryptocurrencies will be left holding worthless computer code. Mark my words, this will happen — do NOT be sucked into this cryptocurrency BS, and avoid Binance like you would avoid COVID.

Where is the pyramid?

Haha, you have no idea what you talking about. Best you go and research first. Do you have electricity at home?

Ciaran, would be nice if you provide the other side of the coin too.
99% of the people that actually trade in crypto don’t complain about it.
The fiat banks complain about crypto, as they are being exposed for their devious strategies and they the losers. Banks even pay regulators and politicians to talk/spread non-sense about crypto.

Well what is taking the FSCA and the other “regulators” so long to F… regulate crypto???

Investors and traders don’t want “warnings” from the FSCA about things the FSCA don’t “regulate” or don’t even seem sure if they do!!! They have just recently apologized to OVEX because they were wrong!!!!

FFS get with it man!!! People want to use offshore exchanges like some in the Seychelles and Canada because SA “regulators” are fast asleep and nobody knows what to expect except for the worst.

This is just more evidence that “regulation” in SA if it ever happen will be an abortion.

Maybe its time for Moneyweb to write some articles on LEGAL offshore crypto opportunities open to South Africans.

I have had it in chunks with this lot!!!

The establishment “cautions” people against things they have little or no control over and therefore no control over you and your decisions regarding your own risk which you should be free to make and take.
Such controls inhibit freedom under the guise of “in your interest, or for your own safety or health”.
Governments do not feel,or are not concerned about you.Absolute control is their goal on the road from socialism to absolute centralised authority aka.communism as practised in China, who recently relieved Jack Ma and others of some of their fortune as aid for the regimes failures.

Crypto provide a means for people to cut out the middle man(banks). Crypto transactions cost almost nothing and are almost instant too. Banks(fiat) cost a lot of money and can take up to 2 days. You can actually earn real interest on your savings, compare to nothing by the fiat banks.

Which is fantastic if you are a drug dealer/arms trader/ human trafficker. For REAL business people currency volatility is a significant issue. If you had any understanding of real business you would realise that the adoption of crypto is very much dependent on proper stability. I firmly believe in the principle of crypto, BUT, because of highly uninformed speculators it is actually limiting the long term viability and adoption of Crypto. So the more huffy puffy hype around Crypto, the less viable it is for people who drive real economic investment.

Crypto is the fastest adoption of any technology ever. Even faster than the internet and mobile phones. Do you know anything about smart contracts, defi,nft/gaming…to name a few…

CNN replay.. Drug dealer/human traffic/arms trader industry were not born a couple of years ago, they have been around for decades(accepting hard fiat currency, that you can’t trace). You can trace crypto tho.
The technology involved in crypto will blow your mind and are changing the ‘real business” as you know it. Already insurance, some banks, supply chains are using this.

Not sure your age, but something tells me you are ‘mature’..Do you go to your grandparents for advice on the latest/greatest technology advances ?
Crypto is not just about tokens/coins you can buy/sell on exchanges….

Non sense. You sound like cnn trying to convince us that human trafficking drug dealing and arms trader arenew industries that only take crypto currencies.
Crypto is the fastest adoption of technology ever. Yes, faster than the internet and mobile phones.Many banks, insurance and supply chins already use smart contract technology (do you know what this is?) – so real business as you know it, already use ‘crypto”. Crypto is not just about the crypto coins you can buy/sell/store from exchanges…did you know that?
Do you go to your grandparents for advice on the latest and greatest cutting edge technology?

I take it Elon Musk is then not a REAL business person for adopting crypto in your book?

Quite a bold statement you are making?? Or does he just not understand REAL business??

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles:
Click a Company: