Binance Ends Trading and Other Activities for South Africans

Users from the African nation have until 2022 to close their accounts as Binance users feel the regulatory grip tighten once again.

South Africa Gets Restricted Access

Binance has scaled down its services accessible to South Africans. Henceforth, South African users of the world’s biggest exchange will not be able to open new trading accounts for crypto derivatives. 

Once again, Binance has had to close accounts related to derivatives as the company becomes more proactive in its compliance approach. Binance announced the new development on October 8 in a blog post:

“We will cease offering the following products to South African users: Futures, Options, Margin, Leveraged Tokens. With immediate effect, South African users will be restricted from opening new accounts for these products.”

South Africans who are already operating derivatives accounts have 90 days to 23:59 (UTC) of January 6, 2022, to terminate their positions. After that date, Binance will close every other open position.

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Binance in the Regulatory Spotlight

Efforts by regulators of different countries to regulate the crypto industry have increased in recent times. Binance has gotten a fair share of regulatory attention and has had to shut down its derivatives market in Germany, Italy, and the Netherlands, etc. 

On September 3, South Africa’s Financial Sector Conduct Authority (FSCA) issued a notice stating that Binance’s activities in the country were unregulated. Binance responded at the time that it indeed does not shy away from regulations and had previously cooperated with the country’s Financial Intelligence Centre.

In its blog post, Binance hinted that trimming its South African operations became necessary to conform to the country’s regulatory environment – an apparent response to FSCA’s notice. 

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Implications for the Industry

Anonymity and financial freedom were key promises that blockchain and cryptocurrencies offered. For a while, the industry had flourished without much regulatory attention. But lately, concerns about the use of cryptocurrency for terrorism financing and money laundering have been growing. Many countries are beginning to look at the activities of crypto exchanges like Binance.

Complying with regulations will surely lead to users giving up their rights to blockchain anonymity. Already, Binance has reviewed its KYC policy: Binance users must pass KYC requirements to be able to use the exchange. It effectively means that every transaction on the exchange can be traced to the individual or organization that did it.

It might be a small price to pay for anyone who wants to continue transacting on centralized crypto exchanges such as Binance. 

Source : bsc.news