Binance, a leading global cryptocurrency exchange, has revealed plans to shift its South African derivatives operations to its subsidiary in Bahrain, Binance Bahrain B.S.C. (c). This strategic decision aligns with the regulatory standards of both South Africa and Bahrain, allowing Binance to maintain compliance while effectively continuing to serve users in both regions.
As part of this transition, South African users who wish to continue trading derivatives on Binance will be required to create new accounts with Binance Bahrain. They will also need to undergo a new Know-Your-Customer (KYC) verification process, adhering to the standards set by the Central Bank of Bahrain. This migration is seen as a response to the increasing global regulatory scrutiny that has prompted Binance to align more closely with established regulatory frameworks.
Binance Bahrain will now be the official entity overseeing derivatives trading for South African users. It will operate as a Juristic Representative of the FiveWest OTC Desk (Pty), reinforcing Binance’s commitment to adhering to local and international regulations. This shift necessitates that South African users accept new terms and conditions and resubmit the required KYC documentation.
While this may introduce some inconvenience for users, Binance views these measures as crucial steps to comply with international regulations and maintain its operational status in South Africa. The Central Bank of Bahrain’s regulatory framework, under which Binance Bahrain is licensed as a Category 4 crypto-asset service provider, mandates these rigorous compliance measures. This license not only enables Binance Bahrain to operate a crypto-asset exchange but also to offer custodian services, providing a secure and compliant trading environment.
Binance Bahrain’s designation as a Category 4 Crypto-Asset Service Provider under the Central Bank of Bahrain allows it to deliver a comprehensive range of crypto services within a strict regulatory framework. This structure offers a robust foundation for Binance, even as it faces regulatory challenges in other regions, such as ongoing legal scrutiny in the United States.
In addition to this strategic shift, Binance recently reinstated Mastercard payments for cryptocurrency purchases. This service, which had been previously suspended due to legal issues in the U.S., marks Binance’s efforts to maintain a broad range of payment options despite legal challenges from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
As Binance continues to expand its reach, it has achieved a milestone of 200 million users, managing $100 billion in assets under custody as of 2024. This growth, representing about 36% of the global cryptocurrency user base, underscores Binance’s strong appeal in the crypto market. The addition of 40 million users in 2023, followed by 30 million more in the first half of 2024, highlights the exchange’s ongoing popularity among cryptocurrency enthusiasts around the world.
