Binance to Move South African Derivatives Operations to Bahrain
Date: 2024-09-04 Author: Oliver Abernathy Categories: BUSINESS
Binance, one of the world’s leading cryptocurrency exchanges, today announced that it has moved its South African derivatives operations to a subsidiary called Binance Bahrain B.S.C. (c).
This unexpected move by Binance complies with regulatory requirements in both South Africa and Bahrain, ensuring compliance and continued service in both countries.
South African users who wish to continue trading derivatives on Binance must now register new accounts with Binance Bahrain and re-go through the Know Your Customer (KYC) process. This is a new requirement set by the Central Bank of Bahrain.
South African Users Must Re-register with Binance Bahrain
The decision to move derivatives operations in South Africa to Binance Bahrain comes as it faces regulatory compliance concerns amid growing scrutiny from financial authorities around the world.
Binance Bahrain will now officially manage derivatives products for South African residents, effectively becoming the legal representative of FiveWest OTC Desk (Pty).
South African users of the Binance derivatives platform will be required to create new accounts with Binance Bahrain, accept new terms of use, and re-submit all required KYC documents.
While this process may be inconvenient for users, it is seen as a necessary step to ensure Binance meets international standards and continues to operate legally in South Africa.
The compliance process is part of Binance’s broader strategy to navigate the complex regulatory environment set by the Central Bank of Bahrain, which licensed Binance Bahrain as a Category 4 Crypto Asset Service Provider.
This license allows Binance Bahrain to not only operate a crypto asset exchange but also provide comprehensive custody services, ensuring a safe and compliant trading environment for its users.
Binance Faces Global Regulatory Challenges
Binance Bahrain’s status as a Category 4 Crypto Asset Service Provider licensed by the Central Bank of Bahrain allows the exchange to provide a full range of services within a strict regulatory framework, including exchange operations and custody services.
This structure provides a stable operational base from which to strengthen its regulatory position despite ongoing challenges in other jurisdictions such as the United States.
Binance recently resumed accepting Mastercard payments for cryptocurrency purchases, a service previously suspended due to legal difficulties in the United States, where the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have filed multiple charges against the exchange.
As Binance expands its user base to reach 200 million users in 2024 and hold $100 billion in user assets in custody, the exchange remains focused on enhancing operational security and compliance measures.
Reaching the 200 million user mark represents about 36% of the total number of cryptocurrency users worldwide.
This significant growth, which includes the addition of 40 million users in 2023 and another 30 million in the first half of 2024, reflects the exchange’s continued appeal to crypto enthusiasts around the world.
In addition to regulatory adjustments, Binance also faces legal challenges in other regions.
In fact, a recent report indicates that Binance is hiring over 1,000 new employees, most of them in compliance.
The upcoming trial of Binance CEO Tigran Gambaryan in Nigeria coincides with the latest developments in the Binance vs. SEC case in the US.
Tigran, who has been detained in Nigeria since February, filed a new bail application on medical grounds on Monday. However, his family said that lawyers representing Nigeria’s Economic Crime Agency object to this.
Commenting on this, the Binance CEO noted that Tigran should be allowed to go home to receive medical attention.
Notably, the ongoing legal battles facing the exchange and its management also include the withdrawal of 10 lawyers representing Binance CEO Changpeng ‘CZ’ Zhao and his upcoming release from the special institution.
