The regulatory body has instructed Binance to discontinue all cryptocurrency-related services in Belgium immediately due to the company’s inability to furnish adequate information regarding its non-European Economic Area (EEA) entities.
The Financial Services and Markets Authority (FSMA) of Belgium has issued a directive to Binance, a leading cryptocurrency exchange, to cease providing cryptocurrency exchange and custody wallet services.
As per a notice issued on June 23, the FSMA has asserted that Binance is in contravention of Belgian laws on Anti-Money Laundering and Combating the Financing of Terrorism by providing crypto-related services “from countries that are not members of the European Economic Area.” The financial regulator has directed Binance to abruptly discontinue all such services in Belgium.
The FSMA has stated that Binance holds control over approximately 19 companies located outside of the European Economic Area, including nations such as Iceland, Liechtenstein, and Norway, which are involved in the exchange’s operations or technical support. These companies were not disclosed in the terms and conditions that Belgian users agreed to when availing of Binance’s services. The regulator has further mentioned that it had made numerous requests to Binance for information, however, the responses received were unsatisfactory and did not provide clarity on the services that these companies offered
According to the FSMA, despite being presented with various opportunities, Binance has not been able to provide sufficient evidence and documentation to demonstrate that its exchange services for virtual and legal currencies, as well as its custody wallet services offered in Belgium, are being carried out through a legal entity that is authorized by its home member state within the European Economic Area to conduct such activities, even within Belgium.
As per the directive, Binance has been mandated to communicate with its customers based in Belgium and return all cryptocurrency and private keys that were held by the exchange. In response to the FSMA’s ruling, a spokesperson for Binance conveyed their disappointment and stated that the company intends to examine and evaluate the regulator’s notice.
The FSMA’s move to take action against Binance is among several regulatory actions being taken against the exchange, with the United States Securities and Exchange Commission pursuing a legal case against Binance and its U.S. entity for purported contraventions of securities laws. Additionally, Christophe De Beukelaer, a member of the Belgian parliament, made public his intention in January 2022 to receive his government salary in Bitcoin, amounting to $30,753, for the duration of a year.
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