Watchdog the Financial Conduct Authority has banned the world’s largest cryptocurrency exchange, Binance, from performing any regulated activities in the UK.
Binance’s services include trading in digital coins, futures, options, stock tokens, savings accounts and even lending.
Users of the popular platform can still buy and sell cryptocurrency, as this is not regulated, but products around cryptoassets such as futures are regulated and covered by the ban.
In effect, people in the UK are not allowed to use Binance’s services to speculate, or bet, on whether the price of, say, Bitcoin goes up or down.
The FCA also issued a consumer warning about Binance.com, specifically to be wary of adverts promising high returns on crypto investments. The ban also prevents Binance from performing any advertising or financial promotions.
A similar warning about the platform was issued to US consumers by regulator the SEC in April while on Friday Japan’s Financial Services Agency warned Binance – for the second time in three years – that it is operating there without permission.
The FCA said that Binance Markets Limited (BML), which is based in London and owned by Cayman Islands-headquartered Binance Group, has until Wednesday to comply with the demands set out in its ruling.
This includes publishing a notice on its website stating: “BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK.” The firm also must “secure and preserve all records and/or information… relating to all UK consumers” from its systems.
When deciding whether to grant a licence, the FCA looks at a company’s controls and practices to prevent money laundering and financing of terrorism.
“Binance Markets Limited is not permitted to undertake any regulated activity in the UK,” the FCA stated. It added: “No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK.”
BML had attempted to become a registered cryptocurrency company but the application was dropped recently after engagement with the FCA.
A Binance spokesman said: “BML is a separate legal entity and does not offer any products or services via the Binance.com website.
“The Binance Group acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions.
“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.”
Trading volumes on the platform reached an astonishing $1.5 trillion in May.Cryptocurrency