Binance, the world’s largest cryptocurrency exchange, has been banned by UK financial regulators.
The Financial Conduct Authority (FCA) has determined that “regulated activities” cannot be carried out in the United Kingdom.
It also warned consumers about Binance.com and advised people to be wary of ads that promise high returns on their investments in crypto assets.
This happens in response from regulators around the world against cryptocurrency platforms.
Binance.com is an online centralized exchange that offers users a variety of financial products and services, including buying and trading various digital currencies, digital wallets, futures, securities, savings accounts and even lending.
Binance Group is currently based in the Cayman Islands, while Binance Markets Limited is an affiliate based in London. The company is dotted with multiple entities around the world, and the Binance Group was previously based in Malta.
The FCA stated that Binance Markets Limited (BML), owned by the Binance Group, is not currently permitted to carry out regulated activities without the prior written consent of the FCA. We will comply with the ruling until Wednesday.
Regulators also emphasized that none of Binance Group’s entities have any form of authorization, registration, or license to carry out regulated activities in the United Kingdom.
The FCA does not regulate cryptocurrencies, but it does regulate crypto assets. In order to promote or sell such products in the UK, the company must be approved by the regulatory authority.
This means that British people are not allowed to use Binance’s services to speculate or bet on the price of cryptocurrencies like Bitcoin.
However, they are allowed to use the website to buy and sell unregulated cryptocurrencies, cryptocurrency analyst Colin Stone told BBC World Service’s World Business Report program. It was.
However, Binance told the BBC that the FCA notice had no “direct impact” on the services offered by the website Binance.com.
“BML is an independent legal entity and does not offer products or services through the Binance.com website,” said a Binance spokesman.
“The Binance Group acquired BML in May 2020, but has not started operations in the United Kingdom and has not used FCA regulatory approvals.”
He added that the company’s relationship with users has not changed: “We are working with regulators to take a collaborative approach and take compliance obligations very seriously. Policies in this new area. , Are actively keeping up with changes in rules and laws. “
Controversy over Binance’s activities
This isn’t the first time Binance has been monitored by regulators for its global operations.
In the United States, one of its entities, Binance Holdings, has been investigated by the US Securities and Exchange Commission (SEC), especially those dealing with money laundering and tax evasion. Bloomberg..
The SEC issued a similar warning to US consumers in April about the platform.
On Saturday, Binance announced that it would withdraw from Ontario, Canada, after the Ontario Securities Commission (OSC) accused Binance and several other crypto trading platforms of not complying with state regulations.
And on Friday, the Financial Services Agency (FSA) of Japan warned that Binance is operating domestically without permission for the first time in three years.
One of Binance’s services is the ability to purchase digital currencies using local currencies. It is known in the industry as fiat money. In mid-June, Binance’s US partner Silvergate Bank decided to suspend the processing of its US dollar deposits and withdrawals, according to the company. Coin desk..
Cryptocurrency exchanges say that not all of their entities are connected to it, but longtime crypto investor and entrepreneur Nick Saponaro finds this useful for avoiding regulatory issues. Tell the BBC that it is a tactic.
“Binance has moved to new jurisdictions several times in the process of its operation,” he said.
“This is not uncommon for these emerging crypto businesses … if regulations don’t meet their needs, they just run their business.”
Binance.US, another entity of the company, is currently one of the largest cryptocurrency exchanges in the United States, and Binance is one of the largest companies in the global fintech industry, he says. ..
“I think they’re trying to comply with regulations, but they’re often a’forgive’model in these businesses. [where] They want to be able to make enough money, so even if they are fined, they can be ignored compared to what they earned. “
Saponaro, who co-founded the blockchain payment ecosystem Divi Project with cryptocurrency Divi, said the real problem with cryptocurrency exchange is that they are still centralized in that there is still a central authority to manage users. Say’money, almost like a bank.
This is the opposite of what cryptocurrencies and blockchain technology are designed to do, and he says all exchanges need to be fully decentralized so that users have full control over their digital coins. I feel it.
But he emphasizes that digital currencies are not a scam and that the fintech industry will eventually reach it.
“We’ve been in the crypto adoption cycle for 12 years. These things take time. At first, exactly the same thing was said about the Internet,” he said.
“Governments in each jurisdiction, especially the G7, need to be fully transparent and confident in giving them full regulation of what we can and cannot do, and must be consistent with what technology actually does. There is. “