The South African Financial Sector Conduct Authority (FSCA) has issued Binance Group with a reminder that the company is not is not permitted to act as a financial advisor.
The crypto exchange, which is currently under scrutiny from various regulators around the globe, was surprised by the FSCA notice, as the regulator has no power over cryptocurrencies.
In the warning, the regulator said: Binance was not “authorized to give any financial advice or render any intermediary services in terms of the Financial Advisory and Intermediary Service Act”.
In a statement to Decrypt, Binance said that the regulator has no clout over crypto matter and explained that it has been collaborating with the Financial Intelligence Center (FIC).
The two financial regulators have different scopes of operation. FIC is more focused on cracking down on various financial practices that may be directly tied to financing terrorism, whereas the FSCA regulates banks and financial institutions, like the Securities and Exchange Commission’s remit in the US.
Binance further denied the FSCA’s claim that it was a Seychelles-based company, and has always been operating under the assumption that it's a “global company”, with no specified headquarters, although Reuters specifically described it as a Cayman Islands-based entity.
Binance has faced trouble in the UK, Japan and Germany, among other jurisdictions. The exchange has undertaken a variety of steps to strengthen its AML and KYC practices and began scaling down its product offering in late-August to counteract possibly complaints by watchdogs.