• Binance has suspended derivatives trading in South Africa

  • Binance, a global cryptocurrency exchange, is reducing its crypto trading offerings in South Africa.

    Binance announced the end of futures, options, margin, and leveraged trading for South African users in a blog post on October 8. Users who have open positions have until January 6 to fill them.

    A representative from the company wrote on the company’s local Telegram chat: “Binance is constantly evaluating its product and service offerings to ensure that they are accepted not only by users but also by local regulators. We are following through on our compliance commitment.”

    Binance is not registered with South Africa’s Financial Sector Conduct Authority, or FSCA, as a financial service provider, and it does not appear to have applied for registration.

    South Africa, along with Nigeria, is Africa’s leading market for cryptocurrency trading. While local cryptocurrency exchanges have previously been largely unregulated, scrutiny has recently increased. The FSCA warned Binance last month not to provide investment advice, which the company denied.

    The Financial Action Task Force just released a new report on South Africa’s anti-money laundering and counter-terrorism financing (AML/CFT) measures. The report noted a lack of information and licensing in the local crypto industry, based on many of its numbers on crypto exchanges from 2019. It stated the following about virtual asset service providers (VASPs):

    “Other than the reporting obligations that apply to all businesses, VASPs are not subject to AML/CFT obligations and are not subject to AML/CFT supervision. Some VASPs have registered voluntarily.”

    Due to increased regulatory scrutiny, Binance has had to reduce its trading offerings and expand its know-your-customer standards globally.

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