Binance, a major cryptocurrency exchange, has responded to a warning from the Financial Sector Conduct Authority and said it does not offer financial advice or intermediary services to South African residents.
The Binance crypto exchange said in a statement on Friday that the Financial Sector Conduct Authority lacks authority to regulate “crypto-related investments” in South Africa. Also, Binance South Africa denied allegations that residents of the country accessed services for the crypto exchange through the Binance South Africa Telegram group, arguing that the community promoted blockchain education and did not offer financial advice or services.
Despite the fact that the Financial Services Commission of South Africa is a government agency, Binance said the Financial Intelligence Centre of South Africa was the “major regulator” with whom it had been in compliance while operating in South Africa. The leading Exchange spokesperson said that it has contacted the FSCA to clarify its warning of Sept. 3 and to address any concerns regulators may have regarding Exchange.
Binance’s Response to FSCA
“Binance.com is registered with the FIC as a voluntary self-disclosure institution,” said the exchange. “Binance complies with the FIC Act obligations relating to establishing and verifying of clients’ identities, record keeping and reporting suspicious or unusual transactions.”
In its warning, the FSCA urged South Africans to exercise caution when investing in Binance Group, which was described as an “international company” based in Seychelles. Despite this, since July 2017, Exchange does not have any subsidiary with the same name in the archipelago nation.
Crypto in South Africa has been viewed with suspicion until recently, when local governing bodies announced plans to reevaluate the issue. Several months after being formed, the South African Intergovernmental Fintech Working Group announced plans to “phase in and structure” regulation of cryptocurrencies. In some cases, the FSCA cites cryptocurrency scams and financial risks as reasons for pushing for tighter regulations.
As a result of the FSCA warning, Exchange and its affiliates have been barred from providing financial services to citizens of several countries. Italian, Malaysian, Polish, German, UK, Canadian, Japanese, and Singapore authorities have urged investors to exercise caution in regard to Exchange or alleged it is operating illegally.