The South African Financial Sector Conduct Authority welcomes Binance’s action to restrict South Africans from opening new accounts to trade derivatives.
Binance has engaged with the South African FSCA, and has announced that its services to South African clients will be redacted. Binance will no longer allow South Africans to trade futures, margins, options, and leveraged token products, will restrict existing South African residents who are users from opening new positions in derivatives, and give 90 days for users to close out all existing positions. After Jan. 6 2022, all positions in derivatives accounts will automatically be closed. The FSCA welcomes Binance’s amendments to its offerings in South Africa, where it is not domiciled.
The FSCA has again reiterated to South Africans to only consider derivative market transactions with a Registered Financial Services Provider, who is registered according to the Financial Advisory and Intermediary Services (FAIS) Act.
South African authorities determined to protect investors
On 3 September 2021, the South African watchdog issued a public warning against Binance for suspected transgressions of the Financial Markets and FAIS Acts. Thus far, there is no evidence that Binance has sought to register as a financial services provider. Yesterday, the Financial Action Task Force released a new report on South Africa’s anti-money laundering and countering the financing of terrorism (AML/CFT) measures. The report noted the lack of information and licensing in the local crypto industry. The report said that virtual asset service providers (VASPs) are not subject to AML/CFT obligations other than the reporting obligations that apply to all businesses.
Binance will leave some of its South African offerings untouched
It should be noted that, despite the new restrictions imposed by the FSCA, spot trading will still be allowed. South African derivatives users will also be able to top-up margin balances to prevent margin calls and liquidations. Binance has made adjustments to its business activity in Singapore, Malaysia, and Australia recently. South Africa is the second-largest cryptocurrency trading market in Africa, after Nigeria.
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