What Does Binance Being Kicked Out of Belgium Mean for Crypto Prices?

• Belgium regulator FSMA orders crypto platform Binance to immediately cease its operations.
• The platform’s international network of companies was found to violate money laundering and anti-terrorism laws.
• The clampdown by regulators could have far-reaching consequences.

Binance, the biggest crypto platform in the world, has been caught up in a regulatory mess which could have implications for the entire sector and the price of coins. Belgium’s financial regulator, the Financial Services and Markets Authority (FSMA) has ordered Binance to close down its operations with immediate effect after establishing that the international nature of the network of different Binance entities provides a back door to illegal activity.

The FSMA’s expressed concern is that Binance is “offering and providing exchange services in Belgium between virtual currencies and legal currencies, as well as custody wallet services, from countries that are not members of the European Economic Area”.

The Article 136 law Binance is seen to have breached is not one to be taken lightly. The firm now faces “criminal sanctions” if it doesn’t comply with the FSMA, which states that the set-up at Binance provides opportunities for “money laundering and terrorist financing”.

The sanctions imposed by the Brussels-based regulator come at a time when other EU regulators are asking whether they want Binance to be able to operate in their countries. France is already probing how Binance works, with state prosecutors opening a case against the firm for illegally canvassing French citizens and “aggravated money-laundering.” Earlier in the year, Binance gave up plans to operate in the Netherlands after it failed to meet the demands of the country’s regulator.

EU regulator ESMA, which oversees the regulators of the different EU member states, has a stated aim of ‘harmonising’ the protection offered to all EU investors. With the FSMA and other regulators now taking such a stern approach to Binance, there could well be knock-on effects for the platform as others are encouraged by ESMA to take a similar view.

That’s unwelcome news for Binance, but it could also be bad news for those who hold cryptoassets. The closing down of platforms causes uncertainty, and many crypto investors will choose to cash out rather than transfer their coins to another platform. Crypto markets may be unique in many ways, but the classic rules of supply and demand still apply to them, and downward pressure could be put on prices.

There is also the question of whether a stream of withdrawals creates a ‘run on the bank’ and threatens the viability of crypto platforms. Despite their protestations that they are fully collateralised, the move by the FSMA and other EU regulators could be about to turn into a particularly uncomfortable stress test for Binance and other operators.

People Also Read:

• Crypto Traders and Coin Prices Face New Challenge as Binance Gives up its FCA Licence
• Interpol Declares Investment Scams “Serious and Imminent Threat”
• Annual UK Fraud Audit Reveals Scam Hot-Spots

Crowdsourcing information about scam brokers can help others avoid falling into the traps set by disreputable brokers, and you can share your experiences here. If you would like to know more about this particular topic or have been scammed by a fraudulent broker, you can also contact us at [email protected]

About the author: Justin Freeman

Justin is an active trader with more than 20-years’ industry experience of working for big banks and hedge funds. He has an inside knowledge of how the financial markets work, thanks to roles including trader on a $750m Event-Arbitrage desk and CRO and COO of hedge funds running a variety of strategies. From stat-arb and trend-following CTA to fixed-income relative value. Firm’s he has worked at include big banks like Citi, and prominent hedge funds including D. E. Shaw and Millennium Capital Management.

Share

Tweet

Safest Forex Brokers 2024

	Broker	Info	Best In	Customer Satisfaction Score
#1	Your capital is at risk Founded: 2014	Global Forex Broker	BEST SPREADS Visit broker	4.8
#2	Your capital is at risk Founded: 2006	Globally regulated broker	BEST CUSTOMER SUPPORT Visit broker	4.9
#3	* 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money Founded: 2008	Global CFD Provider	Best Trading App Visit broker	5
#4	Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010	Global Forex Broker	Low minimum deposit Visit broker	4.9
#5	51% of retail CFD accounts lose money Founded: 2007	Global CFD & FX Broker (*Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more)	ALL-INCLUSIVE TRADING PLATFORM Visit broker	4.9
#6	Your capital is at risk Founded: 2009, 2015 and 2017	Global Forex Broker	Low minimum deposit Visit broker	5
#7	Your capital is at risk Founded: 2006	CFD and Cryptocurrency Broker	CFD and Cryptocurrency Visit broker	5

Forex Fraud Certified Brokers

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.