The financial regulator in the United Kingdom (UK) has issued an official warning to one of the largest crypto currency exchanges in the world: Binance. Britain’s financial regulator has officially banned Binance from offering its services in the country. The Financial Conduct Authority (FCA) has ruled that the firm cannot conduct any “regulated activity” in the UK. The FCA’s statement, made on Saturday, states that Binance Markets Limited “is not permitted to undertake any regulated activity in the UK.” The FCA also warned UK citizens to “be wary of adverts promising high returns on cryptoasset investments.” Binance‘s existing crypto exchange is not UK-based so despite the FCA ruling, there will be no impact on UK residents who use the website to purchase and sell cryptocurrencies.
No other entity in the Binance Group holds any form of UK authoriation, registration or license to conduct regulated activity in the UK
The FCA does not regulate cryptocurrencies, but requires exchanges to register with them. Binance did not register with the FCA before trying to expand their business in the UK and therefore is not allowed to operate an exchange in the UK. This is just another move by regulators in various countries around the world that have slowed down crypto investors and has caused cryptocurrency prices to decline. The FCA ordered Binance Markets Limited to retain records related to UK customers. They gave Binance until Wednesday to display a notice on its website that reads: “Binance Markets Limited is not permitted to undertake any regulated activity in the UK.”
The FCA included another addition in the statement of which they asked Binance to make, it was a warning. Binance is required to add a warning to their official statement explaining to its users about the volatility of the crypto markets. “Be wary of adverts online and on social media promising high returns on investments in cryptoasset or cryptoasset-related products,” the warning should state, according to the FCA.
Binance is one of the worlds largest cryptocurrency exchanges by trading volumes alone. Binance offers users a range of financial products and services, including purchasing and trading a wide range of digital currencies, as well as digital wallets, futures, securities, savings accounts and even lending. They were set to launch their own digital asset marketplace in Britain. Shortly after it withdrew their application to register with the FCA due to not meeting anti-money laundering requirements. “Binance Markets Limited withdrew their 5MLD application on 17 May 2021 following intensive engagement from the FCA,” a spokesperson for the FCA told CNBC. “The action taken today on Binance Markets Limited has been in train for some time.”
The company is currently registered in The Cayman Islands, while Binance Markets Limited is an affiliate firm based in London. The firm has multiple entities spread around the world and Binance Group was previously based in Malta. The FCA said that Binance Markets Limited (BML), which is owned by Binance Group, is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. It has until Wednesday to comply with the ruling. “The regulator also stressed that no entity in the Binance Group holds any form of authorization, registration or license to conduct regulated activity in the UK.”
Binance Markets Limited is a separate legal entity and does not offer any products or services via the 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.According to a Binance spokesperson.
The UK ban follows news that Japanese regulators sent warnings to Binance on Friday. The regulators said the platform may be operating in the country without proper authorization. Binance will no longer service customers in Ontario, Canada, as of December 31 after regulators there have increased oversight into cryptocurrency asset platforms as well.
China has also cracked down on the cryptocurrency sector in recent months. The country has cracked down on mining activity and told major payment platforms and lenders that cryptocurrency trading won’t be tolerated anymore.