South African financial regulator issues warning about Binance over financial advice and ‘intermediary services’

The Financial Sector Conduct Authority (FSCA) of South Africa on Friday issued a warning against crypto exchange operator Binance Group, saying that the company is not authorized to provide any financial advice or intermediary services.

“The Financial Sector Conduct Authority (FSCA) warns the public to be cautious and vigilant when dealing with BINANCE GROUP as they are not authorised to give any financial advice or render any intermediary services in terms of the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act) in South Africa,” the regulator said in its notice, dated September 3. 

When reached for comment, a Binance spokesperson told The Block that “we would like to take this opportunity to clarify that Binance.com does not provide financial advice or render any intermediary services.”

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For the Telegram group, the spokesperson said Binance has an official Binance South Africa Telegram community, “which promotes blockchain education and community announcements. It is not intended, nor does it provide any financial advice.”

The spokesperson went on to say that Binance does not have an entity named Binance Group based in the Seychelles.

The FSCA said in its notice that “crypto-related investments are currently not regulated by the FSCA or any other body in South Africa” — something it has stated in the past — and this state of affairs was referenced by the Binance spokesperson. 

The spokesperson said that the firm is “committed to taking a collaborative approach in working with regulators and law enforcement globally” and that it is a “voluntary self-disclosure institution” with South African Financial Intelligence Centre.

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“As a member of this programme, Binance complies with the FIC Act obligations relating to establishing and verifying of clients’ identities, record keeping and reporting suspicious or unusual transactions in terms of section 29 of the FIC Act,” the spokesperson said.

South Africa joins the list of countries whose regulators have issued warnings about Binance and its entities or have taken action against it, including Singapore, the U.K., Italy, Japan, Thailand, and Canada. Binance is also reportedly under investigation by the U.S. government.