When the British Financial Conduct Authority (FCA) issued a consumer warning about cryptocurrency exchange Binance on the weekend it caused some confusion.
Headlines quickly flew around the world claiming the UK’s financial regulator had ‘banned’ Binance, the world’s largest cryptocurrency exchange.
“Binance Markets Limited is not permitted to undertake any regulated activity in the UK,” the FCA said in a consumer warning.
“This firm is part of a wider Group (Binance Group). Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA.
“No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK.”
By the close of business on 30 June – London time – Binance Markets Limited (BML) must, according to FCA, cease any advertising, store all its records about UK customers, and put a notice up on Binance.com, social media, and all other communications channels saying it is “NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK”.
The also FCA noted that “most” companies selling cryptoasset investments were not “authorised”, meaning customers may not be protected by regulatory authorities.
Despite the apparent ban, cryptocurrency traders were able to continue trading through Binance.com, the main website of the global Binance Group.
In a public statement on Twitter, Binance responded to the news by saying BML “is a separate legal entity and does not offer any products or services via the Binance.com website”.
“The Binance Group acquired BML [in] May 2020 and has not yet launched its UK business or used its FCA regulatory permissions.”
“Our relationship with our users has not changed.”
We take a collaborative approach in working with regulators and we take our compliance obligations very seriously.— Binance (@binance) June 27, 2021
We are actively keeping abreast of changing policies, rules and laws in this new space. (4/4)
So, if BML doesn’t yet offer any services and Binance says nothing has changed, what was the notice about?
It appears the FCA is drawing a line in the sand with Binance over its local affiliate company which was trying to set up its UK business, BML, that would operate through the website Binance.uk.
Regulatory pressure previously led to Binance creating a local affiliate company in the US – Binance.us – designed specifically to fit the country’s regulations after Binance chose to actively block US IP addresses from accessing its services.
It’s an ongoing battle for the cryptocurrency firm which last week chose to leave Ontario after the large Canadian province began levelling accusations against three other cryptocurrency exchanges for failing to comply with local laws.
Japan’s Financial Services Agency also gave Binance a warning last week for operating without the country’s permission.
The company told cryptocurrency news site CoinDesk it “does not currently hold exchange operations in Japan” or “actively solicit Japanese users”.
Australians are free to use Binance.com although it does place restrictions Australian users trading privacy coins like Monero.