June 23 () – The Belgian Financial Services and Markets Authority (FSMA) has ordered the cessation “with immediate effect” of Binance’s operations in the Central European country.
“The FSMA confirms that Binance is offering and providing currency exchange services between virtual currencies and legal tender, as well as electronic wallet, from countries that are not members of the European Economic Area in Belgium [EEE]”, the financial regulator has alleged. “Therefore, the FSMA has ordered Binance to cease, with immediate effect, offering and providing any of these services in Belgium,” it added.
The agency has explained that both natural and legal persons subject to legislation outside the European Economic Area are prohibited from providing these services in Belgium as a professional activity, “even if it is secondary or auxiliary”. Violating the decreed prohibition, clarifies the FSMA, would constitute an offense punishable by article 136 of the Belgian Law on the Prevention of Money Laundering and Terrorist Financing.
According to the financial authority, Binance offers these benefits in Belgium through “operators” that are not specified in the terms and conditions of service. “There are 27 companies apparently involved in the technical or operational aspects of providing these services, of which 19 appear to be based outside the European Economic Area,” he added.
The FSMA has highlighted that, despite the information requirements made to Binance, it “has not been able to demonstrate through proper documentation or evidence” that the activity in Belgium of the aforementioned entities is authorized by another EEA member state.
LEGAL ISSUES
This is not the first setback that Binance has faced, as the United States Securities and Exchange Commission (SEC), regulator of the markets in the country, accused Binance on June 5, its affiliated companies and its CEO, Zhao Changpeng, from violating US securities laws.
“We assert that Zhao and the Binance entities were not only aware of the rules, but consciously chose to circumvent them and put their clients and investors at risk in order to maximize their own profits,” the SEC said at the time.
In a case filed in federal court, the SEC argued that Binance operated unregistered, rigged stock trading controls, and sold unregistered securities. It also breached trust by diverting assets from its clients to Merit Peak Limited, also controlled by Zhao.
“Through thirteen counts, we find that Zhao and Binance entities concocted an extensive web of deceit, conflicts of interest, lack of transparency and premeditated violation of the legal order,” it added.
In addition, four days later, on June 9, Binance.US, the North American division of the platform, reported that it was suspending deposits denominated in US dollars and that on June 13, at the earliest, it would “pause” services on this platform. currency to operate exclusively with crypto assets. Binance.US justified this move on the “extremely aggressive and intimidating tactics” of the SEC.
“To protect our clients and our platform, we are suspending US dollar deposits today and notifying clients that our banking partners are preparing to pause fiat money (USD) withdrawal channels as soon as June 13, 2023. Binance.US tweeted, urging affected users to take “appropriate action.”
