Immediately after being ordered to stop operations in Singapore due to lack of the necessary licenses, Binance now faces the same problem in South Africa. Previously, the exchange hit a wall in several other countries, including the US, UK, Japan, Germany, Malaysia, and more.
With South African regulators ordering the exchange to halt operations in the country, Binance is losing access to another market, all because it rushed to expand without first obtaining the necessary licenses.
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In its recent press release, South Africa’s FSCA (Financial Sector Conduct Authority) said that the exchange is not authorized to operate in the country and has warned its users against doing so. The regulator did not make the use of Binance illegal, but essentially said that users would not have the right to request help from authorities if they experience losses or other forms of problems while using the exchange without a license.
Binance, according to regulators, is not in a position to give any financial advice or provide any brokerage services.
The complex situation of Binance
The situation with Binance is quite complex. Binance Group is not a singular entity, but an ecosystem, made up of a conglomerate of companies that belong to the same franchise. For the last four years of its existence, the exchange has been launching regional branches, subsidiaries, acquiring other companies and the like, creating a massive and impressive ecosystem that performed quite well, making it the largest cryptocurrency exchange by volume. in the world.
The reason the exchange took this path was so that it could have regulated headquarters in various strategic markets. It was impossible for a single company to serve the whole world, given that different countries have different rules regarding cryptocurrencies. So, for example, the US SEC considers certain currencies offered on Binance to be securities. Rather than remove them or limit access to them, Binance simply launched a subsidiary, Binance.US, in which it did not offer problematic coins, such as Ripple’s XRP.
This also allowed it to simply close a subsidiary if it ever ran into problems and continue to operate in all other areas of the world. Now, however, Binance subsidiaries are under attack around the world, and it is only a matter of time before another country warns users against the controversial exchange.
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