Binance, the world’s largest cryptocurrency exchange by trading volume, has opted to migrate its users in Belgium to its Polish subsidiary rather than quit the Western European country. In late June, the Belgian financial markets watchdog ordered the exchange to immediately shut down its crypto exchange and custody services in the country as it was serving Belgian users from outside the European Economic Area (EEA).
Binance Brings Belgian Users under Polish Branch
In the order, the Financial Services and Markets Authority (FSMA) identified 27 companies or ‘Binance operators’ it said were helping to prop the exchange’s services in Belgium by offering technical and operational support. However, despite multiple queries, Binance was not able to demonstrate that 19 of these so-called operators are actually located within the EEA and have domestic legal backing to provide such a service in Belgium.
As a result, the FSMA ordered Binance to return all customers’ crypto holdings and keys. However, the regulator gave the exchange the option of transferring its Belgian users to entities regulated under the law of an EEA member state. It pointed out that such firms must be authorized by domestic laws in their countries to carry out crypto exchange and custody services, including within Belgium.
Today (Monday), Binance announced that it will continue to serve Belgian users by migrating them to Binance Poland sp. z o.o. The move enables the business to meet its local regulatory requirements in Belgium, Binance said, adding that the subsidiary is registered as a virtual assets service provider in Poland and can, therefore, provide crypto exchange and custodian services.
“Belgian users can continue using the Binance platform by accepting the Terms of Use of Binance Poland for Belgian users,’ the exchange stated in a blog post. “We may also ask users to resubmit some of the required know-your-customer (KYC) documentation in order to comply with Polish regulatory requirements (details to be provided to affected users).”
FSMA Responds to Binance
In a separate statement released on Monday, the FSMA acknowledged Binance’s decision to begin serving its Belgian customers through its Polish entity. However, the regular noted that only users who agree to work with Binance Poland must be onboarded. Others, if they agree, can be transferred to another authorized subsidiary within the EEA.
Moreover, the Belgian watchdog pointed out that while Europe awaits the implementation of the Markets in Crypto-Asset (MiCA) recently passed by the European Union, the crypto industry remains unregulated in the continent, with oversight limited to the prevention of money laundering and terrorist financing.
“Binance Poland is not subject to any obligation other than those arising from the 5th Anti-Money Laundering Directive,” the FSMA explained.
“In application of that Directive, Binance Poland is registered with the Polish Ministry of Finance. The registration is not, as in many other EEA countries, subject to prudential requirements or an examination of the fitness or propriety of the directors or senior managers of the entities applying for registration.”
Tough Time in Europe
Binance’s efforts to comply with Belgium’s regulator’s requirements occurred as the exchange has been facing a rough patch in Europe. In July, the exchange dropped its license application in Germany as the country's financial watchdog was reportedly unwilling to grant its request.
Additionally, the exchange quit the Netherlands in July after it failed to obtain a virtual asset service provider license in the country. However, it transferred its Dutch customers to a local rival, Commerce.
Similarly, Binance applied for deregistration in Cyprus in June. However, a spokesperson for the exchange said that the company had decided on the move in order to focus on "fewer regulated entities in the EU."
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This article was written by Solomon Oladipupo at www.financemagnates.com.
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