Binance Ordered to Halt Offering Crypto Services in Belgium by Markets Regulator

Updated: 25 June 2023

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Even though the cryptocurrency markets may not be offering much excitement lately, major players in the industry, like Binance, have been going through a busy period. Recently, regulators in Belgium ordered Binance to stop providing crypto services in the country. While this move from Belgium isn’t entirely surprising given the recent developments in the world of blockchain, investors within the country are expressing concerns about the safety of their funds held on the exchange.

After the news of the Bitcoin ETF approval, the price of BTC finally started to climb again, much to the delight of investors worldwide. However, the recent events in the blockchain industry are likely to delay the fulfilment of their expectations for a significant price increase. It may take a few weeks, at the very least, for the situation to stabilize and for market conditions to regain momentum.

FSMA ordered Binance to Cease Offering Crypto Services

The FSMA (Financial Services and Markets Authority) took action against the crypto giant, in a swift pace for violating pre-set Belgian laws. In a decision dated 23 June 2023, the FSMA ordered Binance to immediately cease offering or providing exchange services between virtual currencies and legal currencies, as well as custody wallet services, in Belgium.

This prohibition allegedly applied to individuals or firms governed by the law of a non-European Economic Area (EEA) country. Binance did not dispute the fact that it offered these services in Belgium. However, the FSMA found that Binance’s operations involved multiple entities, some of which were based outside the EEA.

Binance was unable to demonstrate that these entities were authorized to provide such services in Belgium as required by the law. The regulatory body stated that Binance wasn’t able to come up with information to substantiate its compliance with the applicable regulations despite multiple notices. Naturally, this resulted in the regulator’s issue of notice to the exchange, requiring it to cease operations of any crypto-based services in Belgium.

How will this Affect Binance?

Despite having a global presence, Binance has faced numerous challenges in establishing itself in Western markets in recent years. The company has encountered various obstacles that have required it to navigate complex regulatory landscapes in order to continue its operations.

While the top crypto exchange may currently be facing stagnation due to market conditions, it is expected that Binance will make efforts to accelerate its growth and expansion to be well-positioned for the next bull run, whenever it may occur. To achieve this, it is crucial for the crypto giant to have a strong presence in multiple countries.

Considering the current situation, Binance will likely make future attempts to reenter the Belgian market. However, at present, it is evident that the company must cease all exchange activities indefinitely in compliance with regulatory requirements. This pause in operations will likely impact Binance’s plans and strategies for expansion, as it will need to address the concerns raised by regulatory authorities and work towards meeting the necessary compliance standards.

The ability of Binance to regain momentum and resume operations in Belgium will depend on its ability to navigate the regulatory landscape and satisfy the requirements set forth by the relevant authorities.

Binance is Fighting Multiple Legal Battles Across Several Countries

In addition to facing regulatory challenges in Belgium, Binance has encountered scrutiny from other jurisdictions as well. In the United States, Binance’s US-based counterpart, Binance.US, recently reached an agreement with the U.S. Securities and Exchange Commission (SEC).

The agreement aims to ensure that assets belonging to U.S. customers of Binance and Binance.US remain within the United States while a lawsuit filed by the SEC is resolved. The SEC lawsuit alleges that Binance violated U.S. securities laws by offering and facilitating the trading of securities-based digital assets without proper registration.

Furthermore, France has initiated its own investigation into Binance. The French authorities are examining the operations of the cryptocurrency exchange within the country. Another noteworthy development was the exchange’s exit from the Dutch market, citing its inability to meet the registration requirements necessary to operate as a virtual asset service provider in the Netherlands. This decision reflects the challenges Binance has faced in satisfying regulatory obligations in different jurisdictions.

Conclusion

Although the industry appears to be facing challenges with major organizations facing criticism, the price of cryptocurrencies has been experiencing a notable upward trend. It is expected that this trend will continue for some time, even with limited growth, primarily due to the optimistic outlook regarding the introduction of ETFs and other partnerships that attract investor attention.

However, if regulatory issues involving prominent crypto platforms gain widespread attention, it is highly probable that a price decline will occur or prices will remain stagnant for another month.

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