binance cryptocurrency exchange

UK bans Binance under further crackdown on cryptocurrency market

Image credit: reuters

The Financial Conduct Authority (FCA) has banned Binance, one of the world’s largest cryptocurrency exchanges, from operating in the UK.

“Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA,” the regulator said.

“No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK.”

The new ruling, which will take immediate effect, follows a tumultuous year for cryptocurrencies, which have soared in value since the start of the pandemic but have also faced precipitous drops in recent months.

While cryptocurrency remains unregulated in the UK, offering trading services related to it does require authorisation.

Binance said in a statement that Binance Markets, which it acquired in 2020, was not yet using its regulatory permissions, and that the FCA’s move would not impact services offered on its website.

“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.

By 30 June, Binance is obliged to display a notice on its website and social media channels that it is not permitted to undertake any regulated activity in the UK.

Japan’s regulator issued similar actions against Binance last week, while the US Justice Department and Internal Revenue Service are reportedly investigating the firm over possible money laundering and tax offences.

While the FCA did not give a full explanation as to why it has taken this measure, it did issue a broader warning about the crypto market, noting that consumers are not covered by the Financial Services Compensation Scheme.

The extreme volatility of the market has made regulators across the world begin to crack down harder over concerns that consumers could lose large chunks of their investment. Bitcoin, which currently has the biggest market capitalisation, has fallen in value by nearly 50 per cent since mid-April.

In May, China tightened its regulations by banning institutions from offering cryptocurrency registration, trading, clearing, and settlement. This caused the price of Bitcoin, Ether and others to plummet over night.

Last week, Scotland Yard seized £114m of Bitcoin as part of an investigation into money laundering offences.

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