Belgium Imposes Immediate Ban on Binance's Crypto Services
Belgium's Financial Services and Markets Authority (FSMA) has directed Binance, a globally recognized cryptocurrency exchange, to immediately cease its cryptocurrency trading and wallet custodial services in the country. This order is due to the regulator's claim that Binance has been deficient in providing adequate information regarding its non-European Economic Area (non-EEA) firms.
Violation of Anti-Money Laundering Laws & Financing Terrorism Laws
The FSMA, in a notice released on June 23, pointed out that Binance's crypto service offerings via nations not affiliated with the European Economic Area were infringing on Belgium's anti-money laundering and combating financing terrorism laws. Binance, therefore, is required to halt all corresponding services within Belgium at once.
The Issue of Non-Disclosure of Non-EEA Companies
The FSMA asserts that Binance supervises approximately 19 firms located outside the EEA — including EU countries, Iceland, Liechtenstein, and Norway — which are implicated in its operations or technical support, yet are absent from the terms and conditions disclosed to Belgian users during sign-up. Despite several requests for detailed information from Binance, the regulator contends that it hasn't received satisfactory responses identifying the exact services provided by these companies.
Failure to Prove Authorization from Other EEA States
Despite multiple chances provided by the FSMA, Binance has not been successful in substantiating, through appropriate documentation and evidence, that its crypto exchange services and custodial wallet offerings within Belgium are conducted by a legal entity regulated by the laws of another EEA member state and properly licensed by its home country to carry out these activities, including in Belgium.
Binance's Response and Next Steps
Binance has been ordered by the FSMA to reach out to all its clients in Belgium and return all cryptocurrencies and private keys it holds. Responding to this, a Binance spokesperson expressed disappointment over the regulator's decision and stated plans to review the notice.
Growing Global Regulatory Actions against Binance
This action by the FSMA is one in a series of regulatory measures being taken against Binance by national authorities across the globe. The U.S. Securities and Exchange Commission is currently embroiled in a lawsuit against Binance and its U.S. affiliate for purported violations of securities laws. Moreover, Belgian parliament member Christophe De Beukelaer made headlines earlier in January 2022 by announcing his decision to accept his government salary in Bitcoin for a year.