Binance Will No Longer Offer Derivatives Trading in South Africa

Jafrin  |  Oct 9, 2021

Major cryptocurrency exchange Binance will no longer offer futures, options, margin, or leveraged tokens to users in South Africa. Users have until 90 days to reduce and close their positions while new users are restricted to open new trading accounts.

Binance Ends Various Crypto Offerings South Africa

On Oct. 8, Binance published in a blog post that it will cease the offerings of Futures, Options, Margin, and Leveraged Tokens in South Africa to “remain compliant with local regulations.”

The move comes just two weeks after the Financial Sector Conduct Authority (FSCA) warned that Binance is not authorized to provide financial advice or intermediary services in the country as the exchange is no+t registered with the regulatory agency and doesn't seem to have applied for registration.

With immediate effect, new users from South Africa will no longer be able to trade futures, options, and leveraged tokens on Binance. As for existing users, the platform said they will have a 90-day grace period to close their open positions.

During the grace period, “Users will be able to top-up margin balances to prevent margin calls and liquidations, but they will not be able to increase or open new positions.”

“Users will no longer be able to manually reduce or close their positions after 6th January 2022 11:59 PM (UTC). Thereafter all remaining open positions will be closed,” the digital asset exchange added.

Binance and Regulatory Scrutiny

Earlier, Binance ceased derivatives trading services in several European countries as well as in Australia and Hong Kong. Authorities in Britain, Germany, Malaysia, Singapore, South Korea, Japan, and Italy have also issued warnings over its cryptocurrency trading and derivatives activities.

Regulators are worried about consumer protection and AML checks leading to pulling out from some payment partners and institutional investors from Binance.

Meanwhile, Binance took several steps to align its services with regulatory frameworks which include mandating KYC globally and onboarding multiple former regulatory and government officials, appointing them in key compliance roles.

Recently, the exchange has also been trying to upgrade its regulatory profile in Europe, having registered three more firms in Ireland within the past 10 days.

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