Binance hits another wall immediately after Singapore, this time in South Africa
- Binance, the world’s largest crypto exchange by volume, just got rejected by another country.
- This time, the exchange found itself unwelcome in South Africa, whose regulator warned users against it.
- The regulator said that Binance lacks licenses and authorization to work in the country.
Immediately after receiving the order to stop operations in Singapore due to lacking the necessary licenses, Binance is now facing the same problem in South Africa. Previously, the exchange hit a wall in a number of other countries, including the US, the UK, Japan, Germany, Malaysia, and more.
With South African regulators ordering the exchange to halt operations in the country, Binance is losing access to yet another market, all because it rushed to expand without getting the necessary licenses first.
In its recent press release, the FSCA (Financial Sector Conduct Authority) of South Africa said that the exchange has no authorization to operate in the country, and it warned its users against it. The regulator did not make using Binance illegal, but they did essentially say that users would have no right to request any help from the authorities if they experience losses or other forms of issues while using the unlicensed exchange.
Binance, according to the regulators, is not fit to give any financial advice or render any intermediary services.
Binance’s complex situation
The situation with Binance is rather complex. Binance Group is not a singular entity, but rather an ecosystem, consisting of a conglomerate of companies that belong to the same franchise. Over the last four years of its existence, the exchange has been launching regional branches, subsidiaries, it has acquired other companies, and alike, making a massive and impressive ecosystem that worked rather well, and it made it the biggest crypto exchange according to volume in the world.
The reason why 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 entire world, given that different countries have different rules regarding crypto. So, for example, the US SEC considers certain coins offered on Binance to be securities. Instead of removing them or limiting access to them, Binance simply launched a subsidiary, Binance.US, on which it did not offer troublesome coins, such as Ripple’s XRP.
This also allowed it to simply shut down a subsidiary if it ever experiences problems, and still keep operating in all other areas of the world. Now, however, Binance’s subsidiaries are getting targeted all over the world, and it is only a matter of time before another country warns users against the controversial exchange.