Binance adopts stricter South Africa crypto policies
The exchange is complying with the FIC’s directive to implement the FATF’s Travel Rule by April 30.
Binance, one of the world’s largest cryptocurrency exchanges, has announced new compliance measures for users in South Africa, requiring them to submit personal information for both senders and recipients in crypto transactions.
The company says the update aligns with regulatory guidelines in South Africa aimed at tightening oversight of digital asset transfers.
The details
- In an announcement to South African users on its platform, Binance stated that the new guidelines will take effect on April 30.
- Account holders who make transfers into other crypto wallets will now be required to provide the recipient’s full name, country of residence and the name of the exchange receiving the funds.
- Additionally, when users receive cryptocurrency from non-Binance wallets, they will need to provide the same information as it relates to the originator of the transfer.
- The exchange states that incoming deposits will remain as pending transactions until the required information is provided.
- Transactions may also be delayed, not processed at all, or returned to the sender if the required information is not provided, according to Binance.
Key quote
- The announcement read:
“In adherence to local regulatory requirements, Binance will gradually introduce changes to crypto withdrawal and deposit procedures for South African users to make sure we continue operating in full compliance with the local requirements. Starting 2025-04-30, users may need to provide more information when receiving and sending crypto on Binance.”
Key context
- Binance’s announcement is in response to the South African Financial Intelligence Center’s enforcement of the Travel Rule for crypto exchanges in the country.
- Last year, the FIC issued Directive 9 requiring virtual asset service providers (VASPs) to implement the Financial Action Task Force’s Travel Rule before April 30 or face administrative sanctions.
💡Be Smart: Travel Rule
The Travel Rule is a recommendation of the FATF to combat money laundering and terrorism financing on a global scale. Also referred to as the FATF’s Recommendation 16, the Travel Rule stipulates that VASPs collect, verify and share specific customer information before they process the transfer of assets.
It is especially required for digital assets because transactions on a blockchain are pseudonymous, and several centralized exchanges lack strong know-your-customer rules, making crypto a prime enabler for illicit actors to move funds around.
Why this matters
- Since being added to the FATF’s grey list in 2023, South Africa has sought to regulate cryptocurrency as a means to address the global financial watchdog’s concerns.
- The country has since begun issuing licenses to crypto firms alongside other measures to comply with the FATF.
- In a statement last month, the South African National Treasury announced that it had resolved 20 of the 22 action points required to remove it from the greylist.
- The other two requirements are a demonstration of an increase in the investigation and prosecution of complex money laundering and terrorism financing acts, which it hopes to resolve before midyear.
