The U.K. markets watchdog proclaimed the banning of Binance, the largest crypto exchange of the world as per trading volumes. It surfaced after Binance did not match the anti-money laundering provisions of the U.K. FCA.
What Is FCA?
The Financial Conduct Authority (FCA) is referred to as a financial regulatory organization within the United Kingdom; however, it works autonomously of the UK Government, plus happens to be financed by accrediting fees to financial services industry members.
What’s FCA’s Take On Binance Ban?
As per the Financial Conduct Authority of the UK, “ Binance is not authorized to carry out any kind of regulated activity within the provinces of the U.K.”
“Despite the ban, crypto giant Binance could still endeavor cryptocurrency trading with the help of its website within the U.K., like non-registered organizations that can still interact with consumers within the nation,” commented the authorities of FCA.
What Is Binance And Why Is It Banned In The UK?
Binance is referred to as one of the biggest global cryptocurrency exchanges. But, it has dropped afoul of controllers in many nations lately as it accelerates the edges of the crypto services it contributes.
Earlier this month, Japanese regulators warned that the organization is not liable to work there. Moreover, Binance has also been pulled out of Canada, Ontario, following regulatory actions against different exchanges.
Binance had made its U.K. subsidiary as a part of its efforts to turn into a registered crypto exchange within the nation. The approach was to build something related to Binance.us, a nation-specific website that matches regional regulations. Nevertheless, it withdrew its appeal earlier in 2021.
The Financial Conduct Authority (FCA) banned cryptocurrency derivatives trading (provided by Binance) at the start of 2021. It is believed that cryptocurrencies remain highly volatile, and derivatives trading (which enables investors to borrow to use the amount they invest) happens to be too risky for retail investors.
Britain’s Financial Conduct Authority announced that Binance Markets Limited “is not allowed to offer any regulated activity within the U.K.” It allowed them the time till the evening of June 30 to affirm that it has eliminated all financial and advertising promotions, as per the authority’s register. The crypto exchange also needs to make clear on its social media channels, website, and all additional communications that it no longer is authorized to work in the U.K. Binance would not be capable of resuming U.K. operations apart from prior written permission.
While the purpose of the ban is to distinguish legal existence from the world’s largest crypto exchange compared to the reported turnover — FCA professionals specify that the declaration needs to be put on the official website and communication channels of Binance as well as the Binance desktop and mobile applications.
This move stretches an administrative crackdown on the crypto sector between concerns regarding its possible fraud and money laundering involvement. Binance eliminated an application compared to the anti-laundering rule after an absolute commitment from the FCA,” as per the watchdog, which stated that notable action had remained in progress for quite some time.
Binance’s Reaction To The Ban
As per reports, Binance’s authorities believe that the FCA ban has no direct impact on their services as they can offer the same from their website Binance.com. They are working with the regulators and taking their compliance obligations pretty seriously.
HashCash’s Chief’s Insights
“Granting access to cryptos itself does not happen to be a controlled activity, but providing is, which presumably happens to be the pursuit the FCA continues clamping down on,” Raj Chowdhury recently told in an interview.
“These incidents demonstrate that while blockchain might be borderless and decentralized, the technologies developed to support public and open blockchains are not,” commented Raj Chowdhury, Founder of HashCash Consultants. “This appears like a long-time approach. The range that some cryptocurrency businesses work in is gray at best,” he added.
“Binance does not endorse any services or products with the help of the official website,” continued Chowdhury. “The Binance Group procured WazirX and BML and since then has not yet started its U.K. business or exercised its FCA administrative permissions,” added Chowdhury.
“Crypto bulls usually represent complex administrative action showing a sign that the crypto market is growing, and maintaining the potential concerning a more strong safety net can entice further investors. Is this situation a net-negative for crypto space? No. I think it confers maturity,” Chowdhury said.
Crypto markets are not big enough when it comes to posing a serious systemic threat in the present situation, but if they continue to proliferate and grow, regulators would not be complacent on the front.