Key points to remember
- The Belgian financial authority has accused Binance of operating outside the countries of the European Economic Area, which is illegal in Belgium.
- Binance will need to discontinue services immediately while it strives to comply with Belgian laws, as well as to comply with upcoming MiCA regulations.
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The Belgian Financial Services and Markets Authority (FSMA) has order cryptocurrency exchange Binance to immediately cease all operations in the country. The FSMA claims that Binance provided digital and fiat currency exchange services, in addition to custodial wallet services, from countries outside the European Economic Area (EEA), in violation of Belgian laws:
“Despite several requests for information addressed to Binance, the latter has not been able to demonstrate to the requisite legal standard that the legal entities which carry out the services of the aforementioned type in Belgium are actually based in the European Economic Area and are authorized, on the basis of their domestic law, to provide such services in Belgium.
Binance reportedly offered these services in Belgium without legal permission, which is illegal under Belgian financial regulations. Despite several opportunities to prove compliance with legal requirements, Binance reportedly failed to do so. The FSMA’s decision banning Binance from conducting all of its activities in the country takes effect immediately on June 23.
“Binance does not dispute offering such services in Belgium. However, entities providing these services are largely missing, with 19 of the 27 companies involved being based outside the EEA:
“These services appear to be provided by Binance Operators which are not otherwise identified in said contractual conditions.
In addition, the FSMA demanded that Binance immediately take steps to return all cryptographic keys and digital currencies held on behalf of Belgian clients or transfer such assets to entities within the EEA licensed to conduct its crypto business. and guard.
While crypto exchange services and custodial wallet services are currently unregulated except for anti-money laundering and anti-terrorist financing measures, upcoming regulations under the Regulation regulations on crypto-asset markets will provide a more structured framework for crypto-asset activities from January 2025.
This is not the first EU country that Binance has had regulatory issues with.
Binance recently asked to leave Cyprus, citing an increased focus on other larger European markets. This follows its problems with the Netherlands after it failed to obtain a virtual asset service provider license to operate in the country.
Binance, however, is still functioning in Spain, France, Italy, Lithuania, Sweden and Poland.
