Binance blocked South Africans from accessing its margin, options, futures, and leveraged tokens markets after “productive consultations” with the Financial Sector Conduct Authority (FSCA).
In a statement released on Thursday, the FSCA welcomed the “corrective steps” Binance has taken.
Binance is ranked as the biggest cryptocurrency exchange in the world by trading volume.
Last week Friday, it announced that South Africans have been banned from opening new accounts for its cryptocurrency derivatives products.
South Africans with existing margins, options, futures, and leveraged tokens trades open must close out their positions within 90 days as they will be completely cut off from 6 January 2022.
According to the FSCA, Binance took these steps on its recommendations.
Effective 8 October 2021, Binance will:
- Restrict South African residents from opening new accounts to trade derivative products — futures, margins, options and leveraged tokens
- Restrict existing users who are South African residents from opening new positions in derivatives
- Afford current users 90 days to close out all existing positions
“The FSCA cautions the public that should they consider derivative market transactions, then only do so with a properly registered Financial Services Provider,” the regulator stated.
The FSCA issued an oddly-worded public warning against Binance on 3 September.
“The FSCA received information that Binance Group, an international company situated in the Seychelles, has a Telegram group that members of the South African public can join to gain access to their cryptocurrency exchange platform,” the regulator said.
“The FSCA would like caution that in addition to this entity not being authorised to provide any financial services or business, crypto-related investments are currently not regulated by the FSCA or any other body in South Africa,” it stated.
“As a result, if something goes wrong, you’re unlikely to get your money back and will have no recourse against anyone.”
In its most recent statement, the FSCA said it issued the warning for suspected contraventions of financial sector laws, specifically the Financial Markets Act and the Financial Advisory and Intermediary Services Act.
“Binance Group is not domiciled in South Africa or authorised to conduct any financial services business in the country,” the FSCA stated.
South Africa’s crackdown on cryptocurrency-related activities is not limited to the FSCA.
The South African Reserve Bank (Sarb) also recently made it more difficult for South Africans to use Binance by blocking credit and debit cards purchases of cryptocurrency from offshore exchanges.
Sarb’s financial surveillance department also issued a warning earlier this year that it is a criminal offence to transfer cryptocurrency from South Africa to offshore exchanges and wallets.