The United Kingdom bans Binance Cryptocurrency Exchange.
Note: Binance offers DeFi coders $100,000; DeFi market value hits $8 billion
The Financial Conduct Authority (FCA) of the United Kingdom, the country’s financial “police,” has ordered Binance Exchange, one of the world’s largest cryptocurrency exchanges, to cease all regulated activities in the country.
Financial Conduct Authority action.
The FCA’s action is one of the most significant actions taken by any global regulator against Binance Exchange. Binance Exchange has until Wednesday evening to confirm that it has complied with the FCA’s demands and to remove all advertising.
The FCA also issued a consumer warning this weekend against both the Binance holding company and Binance Markets Limited, a London-based affiliate controlled by CEO Changpeng Zhao and overseen by the UK regulator.
Why the ban?
The FCA stated that Binance Markets Limited, which was established by the parent company a year ago to launch a UK-focused exchange, Binance UK, is not approved under the FCA’s cryptocurrency registration regime, which is required for UK groups offering digital asset services.
According to the FCA, “Binance Markets Limited is not permitted to engage in any regulated activity in the United Kingdom.” No other entity in the Binance Group is authorized, registered, or licensed to conduct a regulated activity in the United Kingdom.”
Following the FCA’s order, Binance was ordered to post on its website that “BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK.”
The FCA granted Binance Markets Limited permission to provide traditional currency investment services to consumers, which Binance obtained by purchasing a financial company that was already registered with the regulator. According to public documents, the FCA approved the transaction in June of last year.
The company had also applied to the FCA to become a registered cryptocurrency company, but had withdrawn its application. The FCA confirmed that the application had been withdrawn “following intensive engagement from the FCA,” which could imply that Binance has issues with its controls and practices to prevent money laundering and terrorism financing.
The intervention demonstrates how regulators are cracking down on the cryptocurrency industry due to concerns about its potential role in money laundering and fraud.
What this means for Binance.
Binance is a major player in the cryptocurrency market, providing a wide range of services to customers worldwide, including trading in dozens of digital coins, futures, options, stock tokens, savings accounts, and lending.
According to TheBlockCrypto data, it had $1.5 trillion in cryptocurrency trading volumes last month.
Although the FCA has prohibited Binance from providing services in the United Kingdom, British citizens can still use Binance’s services in other jurisdictions.
The FCA’s decision follows a warning from Japan’s Financial Services Agency (FSA) last week that Binance was engaging in unlicensed cryptocurrency trading with Japanese citizens. It is the FSA’s second warning about Binance, following a similar notice in 2018.
In April, Germany’s financial police warned investors that Binance had most likely violated securities laws by launching trading in stock tokens, which the exchange agency unsuccessfully appealed.