Binance Tells South Africa Regulator It Doesn't Have Jurisdiction Over Crypto

South Africa's Financial Sector Conduct Authority says it doesn't regulate cryptocurrencies. That didn't stop it from issuing a public warning about the exchange.

By Jeff Benson

In brief

• Binance has taken heat from national regulators this year.
• South Africa is the latest country to warn investors about the exchange.

South Africa's Financial Sector Conduct Authority (FSCA) on Friday issued a public warning that Binance Group, the owner of the world's largest cryptocurrency exchange, is "not authorised to give any financial advice or render any intermediary services in terms of the Financial Advisory and Intermediary Services Act."

To which Binance quickly responded: We don't recognize your authority anyway. 

In a statement shared with Decrypt, the exchange said it does not provide financial advice or intermediary services. It went on to point out something outlined in the FSCA's own letter: the FSCA does not regulate cryptocurrencies or crypto exchanges.

For that reason, it hasn't worked with the FSCA but has been "continuously collaborating with the FIC (Financial Intelligence Centre)."

The FSCA regulates financial institutions such as banks and insurers in Africa's second-largest economy, with the twin goals of maintaining fairness in the markets and protecting consumers, akin to the Securities and Exchange Commission in the U.S. By contrast, the FIC cracks down on financial crime such as the financing of terrorism and money laundering. Its closest corollary in the U.S. is FinCEN, the Financial Crimes Enforcement Network.

Binance also picked nits in the FSCA's statement, which referred to Binance Group as "an international company situated in the Seychelles." According to Binance, there is no "associated entity named 'Binance Group' in Seychelles." A February 2020 report by Decrypt found that Binance was registered in the Cayman Islands and the Seychelles, though Binance has been reticent to name a headquarters, preferring instead to present itself publicly as a global company.