Binance, one of the world’s leading cryptocurrency exchanges, announced today that it will transfer its South African derivatives operations to its Bahrain subsidiary, Binance Bahrain B.S.C. (c).
This unexpected move by Binance aligns with the regulatory frameworks of South Africa and Bahrain, ensuring continued compliance and service provision in both countries.
South African users who wish to continue trading derivatives on Binance will now need to register new accounts with Binance Bahrain and complete a fresh Know-Your-Customer (KYC) process. This is the new standards set by the Central Bank of Bahrain.
South African Users Must Re-register With Binance Bahrain
The decision to migrate South African derivatives operations to Binance Bahrain is a response to the increasing need for regulatory alignment, given the growing scrutiny from financial authorities worldwide.
Binance Bahrain will now serve as the official entity managing derivatives products for South African residents, effectively becoming a Juristic Representative of FiveWest OTC Desk (Pty).
South African users of Binance’s derivatives platform will be required to set up new accounts with Binance Bahrain, accept new terms of use, and resubmit all necessary KYC documentation.
Although potentially cumbersome for users, this process is seen as essential for Binance to adhere to international standards and remain legally operational in South Africa.
The compliance process is part of Binance’s broader strategy to navigate the complex regulatory requirements imposed by the Central Bank of Bahrain, which has licensed Binance Bahrain as a Category 4 crypto-asset service provider.
This license not only allows Binance Bahrain to operate a crypto-asset exchange but also to offer comprehensive custodian services, ensuring a secure and compliant trading environment for its users.
Binance Battles With Global Regulatory Challenges
Binance Bahrain’s status as a licensed Category 4 Crypto-Asset Service Provider under the Central Bank of Bahrain positions the exchange to provide a full suite of crypto services under a stringent regulatory framework, including exchange operations and custodian services.
This setup offers a stable operational base to strengthen its regulatory standing despite ongoing challenges in other jurisdictions, such as the United States.
Recently, Binance reintroduced Mastercard payments for cryptocurrency purchases, a service previously suspended due to legal challenges in the U.S., where both the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have filed multiple charges against the exchange.
As Binance continues to expand its user base—reaching 200 million users and holding $100 billion in user assets under custody as of 2024—the exchange remains focused on enhancing its operational security and compliance measures.
The 200 million user milestone represents approximately 36% of the total global cryptocurrency user base.
This significant growth, including the addition of 40 million users in 2023 and 30 million more in the first half of 2024, reflects the exchange’s ongoing appeal to crypto enthusiasts worldwide.
In addition to regulatory adjustments, Binance is also contending with legal challenges in other regions.
Infact, a recent report indicates that Binance is hiring for over 1000 new roles, and compliance is the majority.
The upcoming trial of Binance executive Tigran Gambaryan in Nigeria coincides with the latest developments in the Binance versus SEC case in the U.S.
Tigran, who has been detained in Nigeria since February, submitted a new bail application citing medical reasons on Monday. But his family said lawyers representing Nigeria’s economic crimes agency have opposed it.
Commenting on it, the CEO of Bianace shared emphasizing that Tigran must be allowed to go home for medical treatment.
Notably, regarding the ongoing legal battles faced by the exchange and its leadership, this also includes the withdrawal of 10 attorneys representing Binance CEO Changpeng ‘CZ’ Zhao and his impending release from a halfway house.
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