The news sounds like another warning shot for the Binance platform. At least one thing is certain: Europe does not seem willing to take advantage of the hate campaign unleashed against the exchange by the SEC in the United States to try to become the next global hub for crypto-assets. The Belgian Authority for Financial Services and Markets (FSMA) has just confirmed it.
Indeed, after Gary Gensler's attack on Binance US, Europe seems determined to follow the trend. Many countries have pointed the way out, including France is once again proving to be a highly motivated student.. And this while rolling out the red carpet for Changpeng Zhao (CZ) in November 2021 as part of his "Objectif Lune" (Moon objective), accompanied by a check for 100 million dollars. Belgium also seems willing to play his part.
Binance – Company based outside the European Economic Area
The news came like a bolt from the blue over the weekend. The Belgian Authority for Financial Services and Markets (FSMA) ordered the Binance platform to “immediately cease all offerings of virtual currency services” on its territory. It is a country where, as in France, the status of digital asset service provider (DASP) has been mandatory since May 2022.
But it does not matter! After what appears to be an official investigation, the FSMA has concluded that the Binance platform was carrying out an activity for which it had not obtained authorization. Or, to be more precise, of the "27 companies involved", 19 appear to be based outside the European Economic Area. And as a coincidence in time, this discovery coincides almost perfectly with the attack by the SEC – and by France – on this major cryptocurrency platform.
"The FSMA noted that Binance offers and provides in Belgium exchange services between virtual currencies and fiat currencies, as well as wallet custody services, from countries that are not members of the European Economic Area. The FSMA has therefore ordered Binance to cease, with immediate effect, offering or providing all or part of these services in Belgium."
Binance – Exchange non grata in Belgium?
According to the Belgian FSMA, “Binance has not been able to demonstrate (…) that the legal entities providing (these) services in Belgium are actually based in the European Economic Area and are entitled, on the basis of their national law, to provide such services in Belgium". The main target is the “.com” version of Binance's site, which is located in what could be described as the international waters of today's web.
The FSMA justifies its decision with the fact that “Binance does not deny offering such services in Belgium”. However, the exchange spokesman in charge of the case stated that surprised by this move by the Belgian regulatorat a time when official talks were clearly underway.
"We are disappointed to learn that the FSMA has made this decision despite our ongoing conversations. We are reviewing the details of their opinion and will continue to work with regulators in Belgium and around the world to meet our obligations."
Binance
Result: Binance must “immediately cease all activities in Belgium”. But that is not all. Because the FSMA also requests that the platform “return to the Belgian clients in question all cryptographic keys and/or virtual currencies (which) it holds on their behalf”. And the main question is whether Binance will try to put things right or just pack their bags, as in the recent cases of Cyprus and the Netherlands. A question to follow…
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