Effectively Binance is banned in the UK as all regulated activities must cease this week | Move appears to affect other Binance products including Spot trading | However, there is confusion after company puts out tweets which appear to contradict FCA ruling.
The British Financial Conduct Authority has wielded a huge sword which has meant the world’s largest cryptocurrency exchange by volume, Binance is banned in the UK. The FCA did not give any reasons for it’s decision , which comes just one day after the Japanese financial regulator warned that the company was operating in the country without permission. The company also appears to be under scrutiny in the US and Europe over it’s unregulated activities.
In March 2021, the FCA said that a large number of crypto exchanges were withdrawing their applications as a result of inability to meet the stringent AML (Anti Money Laundering) standards being imposed by the watchdog.
The FCA said that Binance does not have authorisation to conduct, and ordered the company to stop undertaking, “any regulated activity” and since the exchange also pulled its application for the FCA’s crypto-assets register, it will be unable to offer unregulated services, such as spot trading, either.
In Britain, crypto assets in themselves are unregulated, but certain trading products which they are related to, such as futures and options trading are regulated.
The FCA said that it has given Binance Markets Ltd just 3 days to comply, and must not carry out any regulated activities in the UK without prior consent, and warned crypto investors about purchasing cryptocurrency from Binance Markets and the wider Binance group.
“The FCA U.K. notice has no direct impact on the services provided on Binance.com. Our relationship with our users has not changed,” a Binance spokesperson was quoted as saying, but this has done nothing to end confusion about what will and what won’t be permitted in Britain.
A registration regime for crypto exchanges was enacted in the UK in 2020, with the regulator announcing that crypto companies must get approval in order to provide any crypto services in the country. However the deadline for exchanges to be registered has been postponed multiple times, and only a small amount of companies have so far been successful in obtaining registration approval.
In a strange twist, the company went on to say that the FCA notice had no direct impact on the services provided by Binance.com and that their relationship with users has not changed. However, this appears to be directly at odds with the directive from the FCA, which appears to show clearly that none of the Binance business models will be permitted in Britain, meaning effectively ever product and service under the banner of Binance is banned in the UK now.
But not everyone is convinced. Some are pointing out that the move simply means that UK citizens would not be allowed to speculate on price, but would be able to use the Binance.com website to purchase crypto’s, such as Bitcoin and Ethereum.
Twitter users, rightfully seem rather confused as to what’s going on, with many pointing out the clear disparity between what the regulator was saying, and what Binance itself was putting out publicly.
It’s unclear what has prompted the FCA to make such a move, but the move does come during a period of pushback from regulators across the world against crypto platforms, although British Financial Services Minister John Glen said last month that the UK government would focus it’s efforts more on regulating stablecoins, rather than the broader cryptocurrency market.
Binance is one of the largest cryptocurrency exchanges in the world, with many billions of dollars in volume passing through it’s networks on a weekly basis. Founded in 2017, initially in China, it later moved its offices to Japan and Malta, but recently has said it is a decentralized organisation with no headquarters anywhere.