Binance is tightening its compliance measures in South Africa as regulators put pressure on digital asset firms.
The exchange announced changes to its withdrawal and deposit procedures for South African users this week. Starting May 1, users will need to provide additional information, which the exchange says is to “make sure we continue operating in full compliance to the local requirements.”
Users must provide the sender’s information when receiving any digital assets in their Binance accounts. They must also provide the beneficiary’s information when withdrawing any amount of assets from their accounts. The required information will include the full name, country of residence, and name of the ‘crypto’ exchange in case of withdrawal.
Failure to provide the required information will lead to delays or might not be processed at all, the exchange warns. In some instances, the funds could be returned to the originating address.
It’s the exchange’s last-minute ditch to adhere to South Africa‘s Financial Intelligence Center’s (FIC) guidelines, set to take effect on April 30. The FIC requires all VASPs to implement the Financial Action Task Force (FATF) ‘s Travel Rule, which seeks to stamp out digital asset crime by requiring that users share identifying information about their transactional counterparties.
It’s the latest effort by the South African government to oversee digital assets, a sector that’s recorded high growth in recent years. The country is home to Africa’s second-largest digital asset market, after Nigeria, but it has a more mature and regulated trading ecosystem than its West African rival.
South Africa also boasts the continent’s most advanced VASP licensing regime. Last year, it issued 248 licenses to VASPs out of 420 applications.
This explosive growth has also attracted the attention of the country’s taxman. A month ago, the South African Revenue Service (SARS) warned the ‘crypto’ industry that it would take stern action against any tax evaders.
For Binance, Africa is now proving a tougher market, with regulators cracking the whip on non-compliant and unregistered VASPs. Nigeria leads the enforcement: Binance is currently fighting an $81.5 billion lawsuit in the West African nation for back taxes and economic losses after operating for years without a license.
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