Belgian Financial Services and Markets Authority orders Binance to cease services, potentially facing criminal penalties

The Financial Services and Markets Authority (FSMA) of Belgium has ordered the Binance cryptocurrency exchange to immediately cease offering trading and custody wallet services in Belgium.

Belgium: Binance Operating Illegally in the Country

The FSMA pointed out that Binance offers exchange services between virtual currencies and fiat currencies in Belgium, as well as custody wallet services from individuals or companies from non-European Economic Area member states. However, providing these services in Belgium from individuals or companies from "non-European Economic Area member states" is prohibited under Belgian law.

Non-compliance with this ban will result in criminal sanctions under Belgian anti-money laundering and counter-terrorism financing laws.

The FSMA believes that Binance's provision of these services in Belgium violates this ban and has demanded an immediate cessation of exchange services between virtual currencies and fiat currencies, as well as custody wallet services in Belgium by Binance on June 23, 2023.

The Brussels prosecutor has been informed of potential criminal activities.

Belgium: Specific Services Not to be Provided by Overseas Companies in Belgium

The FSMA noted that Binance did not deny providing these services in Belgium.

According to the general terms and conditions provided by Binance.com to customers in Belgium, these services appear to be provided by operators of Binance not explicitly mentioned in the contract terms and conditions. Allegedly, 27 companies are involved in the operation and technology of these services, with 19 companies located outside the European Economic Area.

The FSMA stated that despite multiple requests for information, Binance failed to provide evidence that meets legal standards.

Therefore, the FSMA concluded that Binance did not comply with the requirements and failed to provide the necessary documents and evidence to prove that the exchange services between virtual currencies and fiat currencies, as well as custody wallet services provided in Belgium, are provided by legally authorized entities from European Economic Area member states.

Belgium: Binance Should Immediately Return User Funds to Belgian Entities

In addition to ceasing activities in Belgium immediately, the FSMA also requested Binance to take immediate action to return all cryptocurrency keys and virtual currencies of involved Belgian customers to their accounts, or transfer them to entities authorized by law in European Economic Area member states to provide these services in Belgium.

In the latter case, Binance should take all necessary precautions to ensure the safety of these transfers. This requirement is similar to the situation faced by Binance US, where assets can only remain domestically. Learn about Binance US situation