Binance said the FCA notice would have no direct impact on the services it provides from its website Binance.com
The Financial Conduct Authority (FCA), the Britain’s financial regulator has banned Binance, one of the world’s biggest cryptocurrency exchange, from offering certain services in the country.
A cryptocurrency is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. It typically does not exist in physical form and is typically not issued by a central authority.
The FCA said that Binance Markets Limited is not permitted to undertake any regulated activity in the United Kingdom (U.K.)
Founded by Changpeng Zhao, Binance is a Cayman Islands based cryptocurrency exchange that provides a platform for trading various cryptocurrencies founded in 2017. As of April 2021, Binance was the largest cryptocurrency exchange in the world in terms of trading volume. Binance was initially based in China, but later moved its headquarters out of China due to China’s increasing regulation of cryptocurrency.
A statement from FCA read, “No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the U.K.”
Taking it to twitter, the official twitter handle of FCA tweeted
We have issued a consumer warning on Binance Markets Limited and the Binance Group https://t.co/noyoK1Bj1n
— Financial Conduct Authority (@TheFCA) June 28, 2021
Trading cryptocurrencies is not directly regulated in the United Kingdom (U.K.), but other related activities like selling derivatives does require approval. The move against Binance is the latest in a series of crackdowns by regulators around the world that have rattled crypto investors and caused prices to decline.
The FCA has asked Binance to retain records related to U.K. customers. The company has until Wednesday, i.e., June 30, 2021 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 also issued a consumer warning about Binance and has asked people to be wary of adverts promising high returns on crypto asset investments.
Reacting to FCA’s decision, Binance said the FCA notice would have no direct impact on the services it provides from its website Binance.com. Binance’s existing crypto exchange is not U.K. based so despite the FCA ruling, there will be no impact on U.K. residents who use the website to purchase and sell crypto currencies.
Binance responded with a series of tweets. The first tweet read,
We are aware of recent reports about an FCA UK notice in relation to Binance Markets Limited (BML).
— Binance (@binance) June 27, 2021
BML is a separate legal entity and does not offer any products or services via the https://t.co/QILSkzx7ac website. (1/4)
The second tweet read,
The Binance Group acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions.
— Binance (@binance) June 27, 2021
For questions related to BML, please contact compliance@binance.uk. (2/4)
It further tweeted,
The FCA UK notice has no direct impact on the services provided on https://t.co/QILSkzx7ac.
— Binance (@binance) June 27, 2021
Our relationship with our users has not changed. (3/4)
The last tweet read,
We take a collaborative approach in working with regulators and we take our compliance obligations very seriously.
— Binance (@binance) June 27, 2021
We are actively keeping abreast of changing policies, rules and laws in this new space. (4/4)
The price of bitcoin has tumbled in recent months after hitting a record high near U.S. $ 65,000 in April 2021. The volatile digital currency appeared unmoved by the growing regulatory pressure on Binance. It gained more than 5% over the past 24 hours to trade at U.S. $ 34,800 today, i.e., June 28, 2021.
The U.K. ban comes days after Japanese regulators sent warnings to Binance. Besides, Binance will also no longer service customers in Ontario, Canada, as of December 31, 2021 after regulators there ramped up oversight of crypto markets. In the United States (U.S.), one of Binance Holding has been the subject of a probe by the U.S. Securities and Exchange Commission (SEC), specifically by its officials dealing with money laundering and tax offences.
Separately, China has also come targeted crypto sector in recent months. The country has curbed mining activity and told major payment platforms and lenders that cryptocurrency trading won’t be tolerated.
