Binance – one of the largest cryptocurrency exchange platforms in the world has been banned by regulators in the UK. What this means is that the Cayman Islands-domiciled exchange platform can no longer go on with any regulated activity in the UK.
The ban was issued in a statement dated June 25th by the Financial Conduct Authority (FCA). The financial regulator, in its statement, declared that Binance could no longer conduct any regulated activity and that consumers should be wary of using the platform in any way. “Binance Markets Limited is not permitted to undertake any regulated activity in the UK”, the FCA said. Recently, the exchange platform has been under strict scrutiny from different regulators across various countries and this is another addition to its woes.
According to the FCA statement Binance Markets Ltd., which is the platform’s only regulated entity in the UK, “must not, without the prior written consent of the FCA, carry out any regulated activities”, and this was to take effect immediately.
Although cryptocurrency trading is not directly regulated in the UK, other related activities that include selling derivatives require approval. Warning consumers about using the platform (and other crypto exchange platforms), and the risks arising from the volatility of crypto assets, the FCA said that “be wary of adverts online and on social media promising high returns on investments in crypto assets-related products”.
In a statement, Binance revealed that Binance Markets which was acquired in 2020, had not put its regulatory permissions to use and that the FCA’s decision would in no way affect its services offered on its website.
According to a Binance spokesperson who spoke to CNN Business, the exchange is “…aware of recent reports about an FCA UK notice in relation to Binance Markets Limited. BML is a separate legal entity and does not offer any products or services via Binance.com website. The FCA UK notice has no direct impact on the services provided on Binance.com. Our relationship with our users has not changed”.
Binance was at one point headquartered in China, which was formerly the haven for cryptocurrency establishments. The company had to move in advance of the Chinese government’s ban on cryptocurrency trading. As of January 2018, Binance was the largest cryptocurrency exchange with a market capitalization of $1.3 billion.
China’s anti-crypto crackdown measures have thrown the crypto market upside down with more than $300 billion wiped off the market as a results of recent crackdown actions.
“We take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules, and laws in this new space”, the spokesperson added.
The FCA had demanded that by June 30th, Binance must put up a notice on its website and social media platforms that “Binance Markets Limited is not permitted to undertake any regulated activity in the UK”.
Since the beginning of this year, the FCA has requested that all companies providing crypto-related services should register and comply with the established anti-money laundering rules. As revealed by the FCA, only five of these crypto services providers had registered as of June.
The FCA has still not revealed the reason for taking these measures.
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Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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