Binance adopts stricter South Africa crypto policies
The exchange is implementing the FIC’s directive to engage the FATF’s Travel Rule before 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 the South African users on its platform, Binance said 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.
- In addition, when users receive crypto from non-Binance wallets, they will need to provide the same information as it relates to the originator of the transfer.
- The exchange says that incoming deposits will remain as transactions pending credit 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 it made the FATF’s greylist in 2023, South Africa has looked to regulate crypto as a way to resolve the global financial watchdog’s concerns.
- The country has since begun to issue licenses to crypto firms alongside other measures to satisfy the FATF.
- In a statement last month, the South African National Treasury said it had resolved 20 of the 22 action points required to get it off 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.
