Key Takeaways
- SA regulators have issued a warning to users about Binance.
- New Zealand has also cut ties with the cryptocurrency exchange.
- The main complaint is that Binance's headquarters have long been kept secret.
Many governments have moved away from Binance, telling its citizens who use the service that they would shoulder the burden of any difficulty that comes with it on their own.
The Financial Sector Conduct Authority (FSCA) of South Africa has issued a press statement saying that financing operations of Binanace are illegal in the nation.
The authority stated that the firm is not registered to provide brokerage or financial advice to nationals of the country.
Financial Sector Conduct Authority (FSCA) also warns public to be cautious when dealing with BINANCE GROUP as they are not authorized to give financial advice or render any intermediary services in terms of the Financial Advisory and Intermediary Services Act (FAIS Act) in South Africa, according to a press release.
Related post: The United Kingdom Financial Regulator (FCA) Bans Binance Exchange
Binance and New Zealand part ways
Binance's position is complicated, being a franchise that connects all of the regional cryptocurrency exchanges and subsidiaries.
For a multinational firm, this is done to maintain an organized headquarters in a crucial market while adhering to local rules. Unlike Binance.com, Binance.US does not support XRP.
If things don't go according to plan, Binance may consider shutting regional operations and selling services through the headquarters. Last year, Binance shuttered its Ugandan operation.
The South African warning is for the worldwide organization, implying that the authority will not protect anybody who operates a Binance subsidiary in the future. The FSCA said that "if something goes wrong and you can't get your money back, you have no remedy against anyone."
Related post: Binance Disables Access to Non-Resident Zimbabwean Users
Trying to beat the house has its drawbacks
Binance has long kept its headquarters a secret. This has helped the organization flourish. But the regulators don't like it.
According to FSCA, the Binance group is based in Seychelles, a country recognized for its cryptocurrency-friendly policies. HDR global trading limited, which owns the dubious BitMEX, also had a base there.
The location of Binance's headquarters has been a source of debate for some time. The national Financial Authority then denied the notion that the headquarters was in Malta, while some said it was in the Cayman Islands, while the CZ itself maintained the organization had no headquarters whatsoever.
Many nations including the UK, Japan, Italy, and now South Africa are urging its people not to participate in Binance operations, meaning traders in these countries are not given adequate legal protection.
What should Binance do now to resolve its issues with South Africa?
