Binance users from Belgium switched to its Polish version

Binance, the world’s largest crypto exchange by volume, continues to run into regulatory problems in European countries. Most recently, the exchange decided to migrate its Belgian users to its Polish subsidiary rather than quit the country. The move comes after the platform was ordered to shut down its exchange and custody services in the country, as it was serving Belgian users from outside the European Economic Area.

Binance finds a solution

The order came from the Belgian financial watchdog, the Financial Services and Markets Authority (FSMA). The regulator identified no less than 27 companies, or “Binance operators,” as it called them, who were helping to prop the platform’s services in Belgium.

The firms did so by offering operational and technical support. However, despite multiple queries, Binance still needs to prove that 19 of these operators are in the EEA and have domestic legal backing. With the lack of legal support, the exchange is not allowed to offer its services in Belgium.

The regulator ordered Binance to return all cryptocurrencies to its customers and do the same with the keys. However, instead of forcing the platform to shut down, it provided it with an alternative option — to transfer its Belgian users to entities regulated under the law of an EEA member state.

With Binance already having a subsidiary in Poland that fits this description, the exchange opted to go for this option. The move will allow the company to meet the regulatory requirements demanded by Belgium while its users will still have access to services of the Binance ecosystem.

Binance Poland is registered as a virtual assets service provider, and as such, it has the necessary licenses to offer crypto exchange and custody services.

Binance needs consent from the users

Explaining the situation in a blog post, Binance said that its Belgian users can continue using the platform by accepting the Terms of Use of Binance Poland. “We may also ask users to resubmit some of the required know-your-customer (KYC) documentation in order to comply with Polish regulatory requirements (details to be provided to affected users),” the platform noted.

The FSMA released its own statement on August 28, acknowledging Binance’s decision. The regulator did note, however, that the exchange will need users’ consent before it transfers them to its Polish subsidiary. In other words, only users who agree to work with the neighboring platform can be onboarded. If they agree, others can be transferred to a different authorized subsidiary as long as it is within EEA and properly licensed and regulated.

For the moment, Belgium is still waiting for the local implementation of MiCA rules. Until this happens, the local crypto markets will remain unregulated. Right now, the authorities focus on preventing terrorist financing and money laundering.