The United Kingdom’s Financial Conduct Authority (FCA), which is the country’s financial “police,” has ordered Binance Exchange, one of the world’s biggest cryptocurrency exchanges, to stop all regulated activities in the country.
The action taken by FCA is one of the most significant moves any global regulator has made against Binance Exchange. Binance Exchange has until Wednesday evening to confirm it has complied with the demands of the FCA and remove all its advertising.
READ: El Salvador officially passes Bitcoin as a legal tender
The FCA also this weekend issued a consumer warning against both the Binance holdings company and Binance Markets Limited, which is a London-based affiliate that is controlled by CEO, Changpeng Zhao and is overseen by the UK regulator.
READ: Crypto crash: 3 major risks involved in investing in Crypto
Why the ban?
The FCA stated that Binance Markets Limited, which was established a year ago by the parent company 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.
The FCA stated, “Binance Markets Limited is not permitted to undertake any regulated activity in the UK. No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct a regulated activity in the UK.”
Further to the order from the FCA, the regulator ordered Binance to display on its website that, “BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK.”
READ: China’s financial regulators ban cryptocurrency business
Binance Markets Limited had permission from the FCA to provide consumers with investment services in traditional currencies, something Binance achieved by purchasing a financial company that was already registered with the regulator. The transaction was approved by the FCA last June, according to public documents.
The company had also applied to become a registered cryptocurrency company with the FCA but pulled the application. The FCA confirmed that the application had been rescinded, “following intensive engagement from the FCA”, which could mean that Binance may have issues with its controls and practices to prevent money laundering and the financing of terrorism.
The intervention is an indication of how regulators are cracking down on the cryptocurrency industry over concerns relating to its potential role in facilitating money laundering and fraud.
READ: Iran bans Bitcoin Mining
What this means for Binance
Binance is one of the most important operators in the cryptocurrency market, offering a wide range of services to customers around the world, including trading in dozens of digital coins, futures, options, stock tokens, as well as savings accounts and lending. It recorded cryptocurrency trading volumes equivalent to $1.5tn last month, according to data from TheBlockCrypto.
Although the FCA has restricted Binance from offering services in the UK, British citizens can still access Binance’s services in other jurisdictions.
READ: Why China’s mining ban is good for Bitcoin
The FCA’s decision comes after Japan’s Financial Services Agency (FSA) warned last week that Binance was conducting unauthorised trade in cryptocurrencies with Japanese citizens. It is the second time the FSA has warned about Binance after publishing an identical notice in 2018.
Germany’s financial police also warned investors in April that Binance had probably violated securities rules over its launch of trading in stock tokens, something the exchange tried unsuccessfully to appeal against.
With the trend of Binance’s lack of operating licence, could Nigeria be next?
Third world nations do not have well established institutions to manage this tricky business.
I guess they should watch what UK government has done and do the likewise.
Government hate unregulated currency out of the reaches of their fascist orwellian control so they ban it.
This report is misleading especially in the headline
Binance has not been banned in the U.K. it is just for dealing futures and securities which is a specialised small part which the majority of U.K. Binance users do not use.
There is a concerted intention to leave out important facts with the reports of this ruling to give the impression it’s a total ban when it is not (the key word is “regulated”)- just read the press release from the U.K. FCA and this is totally clear. Crypto is threatening an existing privileged situation for finance institutions and so to bend this Story is just too tempting for them.
Thanks for this clarity Peter
That’s right Peter..Something foolishly fishy about the report.. Especially the quick suggestion for Nigeria to do so(The unregulated headline of this publication)..Come to think of it,Nigeria is not the Capital of UK..
Binance pulled out of its application process for fca license. So do they expect FCA to keep watching them operate? Nigeria can do same. It’s not rocket science, just go after those individuals, organisations and platforms advertising it after a ban just like China. People are not trading it in the dark, they are all over . China is using unconventional approach too by targeting the platforms that form the backbone of the transactions and funnel.
So you are suggesting that Nig Govt should go after the organisations and individuals trading on Cryptocurrency? Imagine a suggestion from someone in this 21st Century, I guesse you must be Lai Mohammed’s kins men.
Unconventional approach? Really???
I agree with you 1984… the “established institutions” don’t want their decades of control and influence to disappear overnight… they didn’t stop the DotCom Bubble… they didn’t stop the housing bubble… because it suited them, and they could still control the fallout…
No one knows the fallout from cryptos, so it has “established institutions” on edge