Binance, the world’s biggest cryptocurrency exchange, has been banned by the UK’s financial regulator.
The Financial Conduct Authority (FCA) has ruled that the firm cannot conduct any “regulated activity” in the UK.
It also issued a consumer warning about Binance.com, advising people to be wary of adverts promising high returns on cryptoasset investments.
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 UK-based so despite the FCA ruling, there will be no impact on UK
residents who use the website to purchase and sell cryptocurrencies.
The FCA does not regulate cryptocurrencies, but requires exchanges to register with them. For Binance to operate an exchange in the UK, they have to register with the FCA.
The FCA move comes amid pushback from regulators around the world against cryptocurrency platforms.
Binance.com is an online exchange which centralizes on offering 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.
Binance Group currently is in the Cayman Islands, while Binance Markets Limited is an affiliate firm in London. The firm has multiple entities dotted around the world and Binance Group was previously based in Malta.
Furthermore, FCA on Binance:
Binance Group, owners of Binance Markets Limited (BML), 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 authorisation, registration or
licence to conduct regulated activity in the UK.
At first sight, the Financial Conduct Authority’s move to bar Binance from operating in the UK will have little impact. After all, it won’t stop the company’s many UK customers from using its exchange based in the Cayman Islands to
buy and sell Bitcoin and other cryptocurrencies.
Nevertheless, in general, the FCA states their strong worries about investing in cryptocurrencies.
The reason it wants them all to register is because it’s concerned about their potential use as a cover for illicit activity – and it wants consumers to be very careful indeed.
As well as forbidding it from setting up an exchange in the UK, the regulator is ordering its UK division to stop any form of advertising here by 30 June. More significantly, it has until the end of this week to show the FCA that it has stored records of all of its UK customers, ready to be handed over if necessary.
UK consumers are to withdraw their assets from any crypto company that is not register with the regulator.
The FCA cannot stop people from trading in cryptocurrencies – but it has got out its biggest red flag and is waving it vigorously.
By Taiyelolu A