UK Financial Conduct Authority bans Crypto-Exchange Company ‘Binance’

Binance.com is an online centralized marketplace that provides customers with a variety of financial goods and services such as cryptocurrencies, digital wallets, stocks, savings accounts, and even loans. The Financial Conduct Authority (FCA) has decided that the company cannot engage in any “regulated activity” in the United Kingdom. It also issued a consumer alert regarding Binance.com, warning individuals to be cautious of advertisements promising unrealistic rates of return on crypto-asset purchases.

The FCA warning, according to Binance, will have no “direct impact” on the services it offers through its website Binance.com. Binance’s existing crypto exchange is not headquartered in the UK. Thus despite the FCA judgment, UK citizens who use the website to buy and sell cryptocurrencies would be unaffected. Although the FCA does not regulate cryptocurrencies, it does demand companies to register with them. Binance is not registered with the FCA and hence is not permitted to conduct a transaction in the United Kingdom.

The FCA decision comes in the midst of a global backlash against bitcoin platforms from regulatory authorities. Binance Group is currently headquartered in the Cayman Islands. Whereas Binance Markets Limited is an affiliate company situated in London. The Binance Group was originally located in Malta and has numerous companies all around the world. According to the FCA, Binance Markets Limited (BML), which is owned by the Binance Group, is not currently authorized to engage in any regulated activity without the FCA’s prior written approval. It has until Wednesday to comply with the regulator’s decision. The regulator also stated that no business in the Binance Group is authorized, registered, or licensed to perform a trading activity in the United Kingdom.

This is not the first time that Binance’s activities have been scrutinized by regulators. According to Bloomberg, one of the firm’s companies, Binance Holdings, has been the target of a US Securities and Exchange Commission (SEC) investigation.  This was regarding its officers dealing with money laundering and tax crimes. In April, the SEC issued a similar warning to US customers regarding the site. On Saturday, Binance announced its exit from Canada. This came after the Ontario Securities Commission (OSC) accused it and many other crypto trading platforms of failing to follow provincial rules. Japan’s Financial Services Agency (FSA) also warned Binance on Friday that it is operating illegally in the nation. Binance provides the option to acquire digital currencies using local money, a feature known in the industry as a fiat on-ramp. Binance’s US partner Silvergate Bank chose to cease processing US dollar deposits and withdrawals of the company in mid-June.