149 Interactions, 4 Today
To add to Binance’s regulatory woes, the Financial Sector Conduct Authority (FSCA) of South Africa issued a warning against the “Binance Group.” According to the notice, “Binance Group” is not permitted to provide financial advice or intermediary services.
In response, Binance denied having provided any such service under the country’s Financial Advisory and Intermediary Services Act, 2002 (FAIS Act). The FSCA circular was released after the watchdog got information about a telegram channel that was run by the exchange. In this regard, Binance Africa tweeted,
1/4 We are aware of the notice published by the South Africa FSCA on September 3 and we can confirm that https://t.co/PbdKFkGVOe does not provide financial advice or render any intermediary services. Also, we do not have an entity called “Binance Group” in Seychelles.
— Binance Africa (@BinanceAfrica) September 3, 2021
The regulator’s official statement also advised users to practice caution when dealing with Binance. However, as per reports, Binance questioned FSCA’s jurisdiction over cryptocurrencies. Moreover, the FSCA statement also noted that crypto-related investments are currently unregulated in South Africa.
In the past week, the regulatory bod clamped down on unlicensed businesses and issued warnings to businesses such as BitCoin Xpress. It has also been tracking social media channels for unauthorized investment businesses.
Meanwhile, this is not Binance’s first run-in with the authorities. It has faced regulatory challenges in a number of nations, including the United Kingdom, the United States, Thailand, Malaysia, and Japan. The Monetary Authority of Singapore (MAS) issued the most recent warning, putting Binance on its investor watch list for operating without a local licence.
Having said that, the exchange has made efforts to comply with local legislation. In reality, it has been collaborating with the FIC (Financial Intelligence Centre) in South Africa to protect investors.
Cryptocurrency regulations in South Africa
While the pace of crypto adoption has increased in South Africa, there is a lack of a clear regulatory framework. As a result, several digital currency start-ups in the country, have been relocating to other regions.
However, it is noteworthy that the country has also entered into international partnerships for the furtherance of CBDC’s trials. Moreover, the South African Reserve Bank (SARB) is expected to conclude a feasibility study by 2022 for a general-purpose retail central bank digital currency (CBDC).
Recently, the country’s Central Bank Governor also discussed the need for regulations in the sector. However, he explained in an interview that crypto is not a currency, but an asset. Further, authorities have been working towards regulating “crypto-assets” due to the proliferation of scamming incidents in the country.