Uruguay has a fairly favorable policy for cryptocurrencies. As proof, the country welcomed its first bitcoin ATM in early 2022. And at the same time, the Central Bank of Uruguay (Central Bank of Uruguay, known as “BCU”) examines the sector to assess its real potential. It also released a roadmap in late 2021 explaining that it wants to regulate cryptocurrencies to protect investors without hindering innovation. However, BCU ensures compliance with applicable standards. In this context, he has just issued a warning against Binance. It is about the offer of savings products that the platform illegally offers to residents of Uruguay.
Indeed, the local press reports that The central bank is investigating the cryptocurrency-based savings products that Binance offers for sale. According to her, the platform, which is nevertheless increasing its compliance efforts, is offering them illegally. This is justified by the fact that in Uruguay the law stipulates that only verified banking institutions (or companies that issue shares on the world stock exchange) can have capacity.
In reality, the right to provide this type of service is conditioned by the fulfillment of certain legal conditions. In particular, it is necessary to obtain registration or authorization from the national regulator. A bit like the French digital asset service provider (PSAN) regime..
Binance would never actually take these steps. This puts the platform in an awkward situation of illegality.
” It is possible to appeal to the general public to use their savings only through financial intermediation institutions authorized to collect deposits on the market or as an issuer registered in the stock exchange register. »
Central Bank of Uruguay (BCU).
Let us remind you that until today, the sector is not yet regulated in Uruguay. But it should be implemented in the coming months.
Binance invited by the Central Bank
As a result, banking currently implements study of savings products in cryptocurrencies. She is also asking Binance to stop advertising its investment products (including savings products).
In order to conduct the investigation, The BCU therefore invites Binance to its premises. Juan Diana, a lawyer specializing in the regulation of the financial system at Brum Costa Abogados in Uruguay, comments on this situation. Considers that the invitation as well as the warning it will open up two levels of discussion. The first will deal with content/consumer protection aspects. Second as to whether Binance can indeed qualify as a BCU regulated business, in which case the debate should be further explored.
Binance – The platform defends itself
Asked by Bloomberg, the world’s largest cryptocurrency exchange defended itself. Indeed, he explains that he is currently focusing on compliance issues with that in mind “regulation is the only way this industry can grow and reach a mainstream audience. »
Moreover, he does not hesitate to recall that on “the world leader in the development of the crypto and blockchain ecosystem”. This is because it works with “legislators, regulators, governments and law enforcement to ensure the safest environment. »
As for the BCU, it does not consider it useful to comment on the case at this time.