Binance in hot water again — this time with Belgium

Belgium is the latest country to take action against Binance, this time ordering the company to stop offering services.

The move comes after reports of a French investigation into the crypto exchange — and a confirmed visit from French authorities — and an ongoing legal battle between Binance and the SEC.

Belgium is one of the 30 members of the European Economic Area. It claims that Binance, through its offerings of custody wallet services and virtual and “legal” currencies, is offering these services in Belgium from other countries not in the European Economic Area.

By law, countries and persons not included in the European Economic Area are “prohibited from offering or providing, within Belgium, by way of a professional activity – even if supplementary or ancillary – exchange services between virtual currencies and legal currencies or custody wallet services.”

According to the Belgium investigation, 27 companies fall under “Binance operators” which are “involved in the operational and/or technical aspects of the provision of these services.”

Nineteen of those companies are based outside of the European Economic Area.

“Despite several requests for information made to Binance, the latter has not been able to demonstrate to the requisite legal standard that the legal entities that carry out the services of the above-mentioned type in Belgium are in fact based in the European Economic Area and are authorized, based on their domestic law, to provide such services in Belgium,” the press release states.

“We are disappointed to learn that the FSMA has come to this decision despite our ongoing conversations,” a Binance spokesperson told Blockworks via email. “We are reviewing the details of their notice and will continue to work collaboratively with regulators in Belgium and around the world in compliance with our obligations.”

Binance has recently announced that it’s winding down operations throughout Europe, claiming that it wants “fewer regulated entities.”

It is exiting from both Cyprus and the Netherlands. A spokesperson for Binance told Blockworks that it did not secure registration with the Dutch government despite its efforts to both comply and cater to regulators and clientele.

The company was registered in Cyprus, but applied to be removed from its list of crypto asset service providers earlier this month.

Binance has said it is preparing for MiCA and aims to focus on “our larger registered markets where we already have a mature footprint, including France, Italy and Spain.”

Back in the US, Binance and Binance US have been focused on the SEC’s case against the crypto companies and Binance CEO Changpeng Zhao.

Earlier this week, Binance US and Binance filed new documents claiming that the SEC made allegations that have been “unsupported by evidence,” including that there was commingling of customer funds.

The defendants requested that the court ensure that the SEC follows “applicable rules” after a June 13 hearing found that “SEC attorneys initially failed to provide answers responsive to the Court’s question, but they eventually confirmed what Defendants argued in their opposition briefs—there is no evidence that BAM customer assets have been misused or dissipated.”

Attorneys for the SEC also admitted at the hearing that Binance US assets “are not going offshore…We’re not seeing any flows of money outside of the United States.”

Binance did not immediately respond to a request for comment.

Updated June 23, 2023 at 3:20 pm ET: Added comment from Binance.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.