binance south africa

Binance halts derivatives trading in South Africa

Binance, the largest crypto exchange in terms of reported turnover, announced Friday that it will no longer offer South African derivatives products and leveraged trading.

This move comes just two weeks after they were warned by the Financial Sector Conduct Authority that he is not authorized in the country to provide financial advice and intermediary services.

Binance replied to regulators’ notice at the time that they don’t offer such services. The FSCA’s head of enforcement also stated that exchange had contacted the regulators to address their concerns. However, the warning remains.

Derivatives products ceased in South Africa

Binance stated in a blog that it is constantly reviewing its product and services offerings to ensure compliance with local regulations. It will therefore cease offering the following products in South Africa.

  • Futures
  • There are many options
  • Margin
  • Leveraged Tokens

Binance will immediately stop accepting new South African users to trade options, futures and leveraged tokens. They stated that existing users will be allowed to close any open positions within a 90-day grace. Users will have a grace period during which they can top up margin balances to avoid liquidations and margin calls. However, they won’t be able to open or increase new positions.

This year, Binance celebrated its fourth anniversary amid a series of regulatory actions. Authorities in Hong Kong, Japan, South Korea and Italy warned Binance about its cryptocurrency trading activities and derivatives activities. Regulators were concerned about consumer protection and AML controls, which led to the expulsion of some payment partners as well as institutional investors.

Changpeng Zhao, the CEO of Binance, said that he doesn’t worry about rival exchanges taking advantage of recent regulatory problems. The company’s ecosystem, which includes futures trading and wallets, payments service, OTC trading and a Visa-backed card, was described by Zhao as difficult to “replicate in one”

Binance was founded in 2008 and has grown to become the largest digital asset platform worldwide. It generates monthly volumes of approximately $2 trillion.

Binance adheres to regulations

The exchange has been working hard to improve its European regulatory profile. It registered three additional firms in Ireland in the last 10 days.

Binance is seeking more licenses to remove regulatory red flags. In response to the slews of warnings in different jurisdictions this year, the exchange also stated that it is looking at establishing additional headquarters and new offices.

CZ raised the possibility of Binance stepping down, and confirmed that Binance was looking for global executives with strong regulatory backgrounds to help them move towards becoming regulated financial institutions.