Belgian financial regulator orders Binance to cease all virtual currency services

The Belgian Financial Services and Markets Authority (FSMA) has ordered major cryptocurrency exchange Binance to stop offering crypto exchange and custody wallet services.

In a June 23 notice, the FSMA said that by Binance offering crypto-related services “from countries that are not members of the European Economic Area,” the exchange was violating Belgian laws on Anti-Money Laundering and Combating the Financing of Terrorism. The financial regulator said Binance must cease “with immediate effect” all related services in Belgium.

According to the FSMA, Binance controlled an estimated 19 companies outside of the European Economic Area — European Union nations as well as Iceland, Liechtenstein and Norway — involved in its operations or technical support that did not appear in the terms and conditions Belgium users read when signing up for services. The regulator said it had made “several requests for information” from Binance but did not receive satisfactory answers identifying the services its companies provided.

“In spite of the opportunities offered to Binance on several occasions, the latter has failed to demonstrate, with due documentation and proof, that the exchange services between virtual currencies and legal currencies and the custody wallet services that it offers and provides within Belgium are carried out by means of a legal entity governed by the law of another member state of the European Economic Area that is duly authorized by its home member state to carry out these activities, including within Belgium,” said the FSMA.

As part of the order, Binance will be required to contact all its Belgium-based clients and return all crypto and private keys the exchange held. A Binance spokesperson told Cointelegraph the company was “disappointed” with the FSMA’s decision and it planned to review the regulator’s notice.

The FSMA is just one of several national regulators taking action against Binance, as the United States Securities and Exchange Commission is currently pursuing a lawsuit against the exchange and its U.S. entity for alleged violations of securities laws. Christophe De Beukelaer, a member of the Belgian parliament, announced in January 2022 that he planned to receive his government salary in Bitcoin (BTC) for a year.

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Update (June 23 at 6:45 PM UTC): This article has been updated to include an attempt to reach out to Binance for comment.