FSMA Orders Binance to Cease Virtual Currency Services in Belgium

FSMA Says Binance Operations Contravene Laws

In a recent development, the Financial Services and Markets Authority (FSMA) has issued an order to Binance, a prominent cryptocurrency exchange, directing them to immediately halt all offerings of virtual currency services in Belgium. 

The FSMA's decision comes in light of Binance's provision of exchange services between virtual currencies and legal currencies, as well as custody wallet services, originating from countries outside the European Economic Area.

According to Belgian law, individuals or businesses operating under the jurisdiction of non-European Economic Area countries are forbidden from engaging in professional activities, including exchange services between virtual and legal currencies or custody wallet services, within Belgium. Violation of this prohibition is subject to criminal penalties under the Belgian Law on the prevention of money laundering and terrorist financing, specifically Article 136.

The FSMA has determined that Binance's operations in Belgium from non-European Economic Area countries contravene this prohibition. Consequently, the FSMA has taken the decision, effective immediately as of June 23, 2023, to order Binance to cease all offerings of exchange services between virtual and legal currencies, as well as custody wallet services, in Belgium.

Binance does not dispute the provision of these services in Belgium. However, the company's general terms and conditions for Belgian clients reveal that the services are offered by undisclosed Binance Operators. Out of the 27 companies involved in the operational and technical aspects of these services, 19 are apparently based outside the European Economic Area.

“Despite several requests for information made to Binance, the latter has not been able to demonstrate to the requisite legal standard that the legal entities that carry out the services of the above-mentioned type in Belgium are in fact based in the European Economic Area and are authorized, based on their domestic law, to provide such services in Belgium”, stated the notice.

In addition to the immediate cessation order, the FSMA has mandated that Binance, after communicating with its clients and considering their instructions, return all cryptographic keys and/or virtual currencies held for Belgian clients. Alternatively, Binance must transfer these assets to entities operating within the European Economic Area and authorized by their respective domestic laws to carry out such activities in Belgium. In the latter case, Binance is obliged to take necessary precautions to ensure the security of these transfers.

The Financial Services and Markets Authority (FSMA) joins the long list of regulators taking action against the leading exchange for violation of laws. 

What is Binance:

Binance is the world's leading blockchain ecosystem and cryptocurrency infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume. Trusted by millions worldwide, the Binance platform is dedicated to increasing the freedom of money for users, and features an unmatched portfolio of crypto products and offerings, including: trading and finance, education, data and research, social good, investment and incubation, decentralization and infrastructure solutions, and more.

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