Bit4You Had Business Problems Before CoinLoan Went Bankrupt

Key Points:

• Bit4You had already faced the risk of registration failure or prosecution before it announced the suspension of activities in April.
• The FSMA had previously informed Bit4You of its intention to reject its registration request.
• The exchange previously announced the suspension of services on the grounds that its main service provider, CoinLoan, went bankrupt.

The Belgian Financial Regulatory Authority (FSMA) said that local cryptocurrency exchange Bit4you had been deregistered as a service provider and was on the edge of prosecution even before the exchange announced its closure last month.

FSMA said in a statement:

“For all intents and purposes, the FSMA recalls that the activity of provider of exchange services between virtual currencies and legal currencies and of provider of custody portfolio services (VASP) is an activity which remains unregulated to date, except for the needs of the fight against money laundering and the prevention of the financing of terrorism (AML).”

The FSMA noted that it had already advised Bit4You of its plan to reject its registration request, even before Bit4You asked to withdraw its provisional registration on May 2. Upon examining the business’s application under anti-money laundering standards, the FSMA alerted the prosecutor of the irregularities observed by previous management, and the company was compelled to alter all of its governance structures as a consequence of the regulator’s findings.

Earlier, on April 28 of last month, Bit4U declared that it would be stopping operations owing to coin loan’s insolvency problem, a cryptocurrency lending platform that entrusted assets.

Bit4You said in an April 26 blog post that it was stopping operations owing to CoinLoan’s bankruptcy and that it had filed for administration in a Belgian court.

Belgium’s crypto registration policy took effect in May 2022, however incumbents like Bit4You may keep interim permits while more extensive applications are assessed. Bit4You announced the suspension of services in April after its major service provider, CoinLoan, declared bankruptcy.

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Harold

Coincu News