LONDON, UK: Britain’s financial regulator has said Binance, one of the world’s largest cryptocurrency exchanges, cannot conduct any regulated activity and issued a warning to consumers about the platform, which is coming under growing scrutiny globally.
In a notice dated June 25, the Financial Conduct Authority (FCA) said Binance Markets Ltd, Binance’s only regulated UK entity, “must not, without the prior written consent of the FCA, carry out any regulated activities … with immediate effect”.
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. Binance has not registered with the FCA and therefore is not allowed to operate an exchange in the UK.
The FCA move comes amid pushback from regulators around the world against cryptocurrency platforms.
Binance.com is an online centralised exchange that offers 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 is currently based in the Cayman Islands, while Binance Markets Limited is an affiliate firm based in London. The firm has multiple entities dotted around the world and Binance Group was previously based in Malta.
It also issued a warning to consumers about Binance Markets and the wider Binance group.
Binance said in a statement Binance Markets, which it acquired in 2020, was not yet using its regulatory permissions, and that the FCA’s move would not affect services offered on its website – Binance.com.
“We take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules and laws in this new space,” a spokesperson said.
Binance announced in June last year that it had bought an FCA-regulated entity and would use it to offer cryptocurrency trading services using pounds and euros.
The move extends a regulatory crackdown on the cryptocurrency sector amid concerns about its potential involvement in money laundering and fraud.
Bitcoin gained on Monday, trading 5.1% higher at $35,309 as of 7:19 am in Hong Kong.
Crypto bulls often interpret tough regulatory action as a sign that the market is maturing and say the potential for a more robust safety net may entice more investors to enter the space.