The world’s biggest cryptocurrency exchange, Binance, has been issued a warning by the UK’s FCA (Financial Conduct Authority), indicating yet another sign of a growing global crackdown on cryptos.
Binance Markets Limited, which is the UK division of Binance, “is not permitted to undertake any regulated activity in the UK” according to an announcement made by the FCA on Saturday the 26th of June.
Businesses offering crypto-related services in the UK are required to register with the FCA, which has provided temporary licenses for the firms that have not yet been approved by the regulatory authority, in order for them to continue trading while the FCA continues their assessment of these firms.
Binance was one of several crypto firms to withdraw their application to register with the FCA as these firms had not met the anti-money laundering requirements of the authority.
“Binance Markets Limited withdrew their 5MLD application on 17 May 2021 following intensive engagement from the FCA… The action taken today on Binance Markets Limited has been in train for some time” according to an FCA spokesperson in a recent article by CNBC.
From the 30th of June, Binance must provide a message on its website and apps which notifies its UK users of the crackdown by the FCA.
The following text must be displayed on a prominent area within the website or application:
An official from the FCA had made it clear that the scope of the ban was, in fact, limited, and that even though Binance Markets Limited is not allowed to offer regulated services in Britain, non-registered firms are still permitted to interact with consumers in the UK.
What this means is that Binance.com could still offer crypto trading services through its website to UK customers, as the firm’s existing crypto exchange is not based inside the country, meaning that there will be no direct impact on residents from the UK who use the website to purchase and sell cryptocurrencies.
The message from the FCA is loud and clear. Although it may not have an immediate impact on Binance’s relationship with its customers, it certainly goes to show that the regulatory body is highly concerned about the dangers of investing in cryptocurrencies.
It’s not only the FCA clamping down on the crypto industry, as the Japanese Financial Services Agency has also warned that Binance is not currently registered to conduct business inside Japan. However, according to a Binance spokesperson, “Binance does not currently hold exchange operations in Japan, nor do we actively solicit Japanese users.”
China has also been increasing its efforts in the battle against cryptocurrency mining as well as crypto-related services, and earlier this month the former U.S. president, Donald Trump, had dubbed cryptocurrency a “scam” and called for tighter regulations on cryptos, further harming the global perception of digital currencies.
Not only is Binance forbidden from establishing an exchange within the UK, but the company’s existing UK division must also stop any form of advertising within the UK by the 30th of June, and must provide proof that all records from its UK customers have been stored,and must do so by the end of this week.