Belgium’s Financial Services and Markets Authority (FSMA) issued an order to cryptocurrency exchange Binance to immediately cease its operation in Belgium.
The order was issued on Friday, June 23.
The FSMA found that Binance provided services from countries that are not members of the European Economic Area.
“Persons or firms governed by the law of a country that is not a member of the European Economic Area are prohibited from offering or providing, within Belgium, by way of a professional activity – even if supplementary or ancillary – exchange services between virtual currencies and legal currencies or custody and wallet services,” says FSMA in a press release.
Non-compliance with the FSMA prohibition can lead to criminal sanctions as stipulated in Article 136 of the Belgian Law on the prevention of money laundering and terrorist financing.
Cease-and-desist order
The FSMA’s decision requires Binance to cease providing exchange services involving virtual currencies and legal currencies, as well as custody and wallet services in Belgium, with immediate effect.
The cryptocurrency exchange does not dispute that it offers these services in Belgium, but the FSMA found that the exchange was unable to demonstrate that the legal entities carrying out these services in Belgium are based in the European Economic Area and are authorised to provide such services in Belgium.
For instance, the terms and conditions governing Belgian clients on the Binance.com platform indicate that these services are provided by unidentified Binance Operators.
It is reported that 27 companies are involved in the operational and technical aspects of these services, with 19 based outside the EEA.
Despite multiple requests for information, the exchange failed to provide the necessary documentation and proof, reads the press release.
In addition to the ceasing operation, the FSMA has directed Binance to promptly contact their Belgian clients. This will facilitate the return of all cryptographic keys and/or virtual currencies held on their behalf.
Alternatively, Binance can transfer these assets to entities governed by an EEA member state duly authorised to conduct such activities in Belgium.
Should the latter option be chosen, Binance must take all necessary precautions to ensure transfer security, says FSMA.
The Crown Prosecutor of Brussels has been informed of the acts that may constitute a criminal offence.
Commenting on the Belgian regulator’s decision, Binance expressed disappointment at its actions.
“We are disappointed to learn that the FSMA has made this decision despite our ongoing negotiations. We are investigating the details of his notification and will continue to engage with regulators in Belgium and around the world. This is in line with our commitments,” says Binance to Bloomberg.
Trouble for Binance in the Dutch and US market
The announcement comes a few days after closing its Dutch operations since it could not meet registration requirements.
Earlier this month, the US Securities and Exchange Commission (SEC) accused Binance and its founder Changpeng Zhao of operating an elaborate scheme to evade US federal securities laws.
Consequently, the SEC charged the cryptocurrency exchange and Zhao with 13 offences, including operating an unregistered securities exchange.
Read the orginal article: https://siliconcanals.com/news/binance-to-cease-operation-belgium/
