Binance, the largest crypto exchange by trading volume, has strengthened compliance regulations for users in South Africa, in line with the country's regulatory requirements.
This development comes four years after the exchange had legal commitments with South African regulators, leading Binance to adjust its services.
Binance Tightens Compliance for South African Users
Binance has announced stricter regulations for users in South Africa. Starting from April 30, users must provide detailed information about both the sender and recipient of any crypto transactions on the exchange.
"To comply with local regulatory requirements, Binance will gradually introduce changes to the crypto deposit and withdrawal processes for South African users to ensure we continue to operate fully compliant with local requirements," Binance announced.
Specifically, for deposits, South African users will need to provide sender information when receiving any amount of crypto into their Binance exchange account. For crypto withdrawals, users must provide beneficiary information when sending any crypto out of their Binance account.
Detailed information may include full name, country of residence, and information about the original exchange.
"This update only affects crypto deposits and withdrawals," Binance explained.
The exchange will request this information through a pop-up notification when performing affected transactions.
Moreover, failure to provide this information may lead to transaction delays or complete inability to process. This means crypto assets will be returned to the original sender.
The implementation of these requirements follows increasing pressure from South African regulators, who are pursuing closer oversight in this sector.
Meanwhile, this is not the first time Binance has complied with South African regulations. Four years ago, the top exchange discontinued multiple services in the country, including futures contracts, options, margin trading, and leveraged tokens.
Furthermore, South Africa's FSCA (Financial Sector Conduct Authority) welcomed Binance's action in restricting South Africans from opening new accounts to trade derivative products.
This decision is part of the regulator's effort to ensure their citizens only conduct derivative market trades with a Financial Service Provider registered in compliance with the FAIS Act. FAIS stands for Financial Advisory and Intermediary Services.
As South African residents prepare for new regulations related to the Binance exchange after April 30, the question arises: Will Kenya be the next destination?
Kenya Begins Taxing Crypto Exchanges
Recently, there have been indications that Kenya might start taxing crypto exchanges on commissions received from over four million digital currency users in the country. However, this move depends on the passage of new regulations.
According to newly proposed regulations guiding digital service tax payments, crypto exchanges operating in Kenya will be required to pay a 1.5% tax.
"For the purposes of these Regulations, an electronic, internet, or digital marketplace provider subject to tax includes... facilitating online payment for, exchange or transfer of digital assets, except services exempted under the Act," Business Daily reported, quoting former Finance Minister Njuguna Ndung'u.
These comments came after the National Treasury published the Draft National Policy on Virtual Assets and Virtual Asset Service Providers and the Virtual Asset Service Providers Bill, 2024, aimed at bringing clarity and oversight to the digital asset ecosystem.
Such legislation could require crypto exchanges operating in Kenya to adopt similar requirements as Binance in South Africa.
