The United Kingdom Financial Conduct Authority has well-ordered Binance, one of the world’s principal cryptocurrency exchanges, to stop the overall controlled activity and issued a warning to consumers about the platform, which is coming under growing scrutiny globally.
Binance is a Cayman Islands-domiciled cryptocurrency exchange that provides a platform for trading various cryptocurrencies and was the largest in the world in terms of the trading volume.
The Financial Conduct Authority (FCA) said Binance Markets Limited,
“Binance’s UK entity, must not, without the prior written consent of the FCA, carry out any regulated activities with immediate effect”.
The intermediation by the Financial Conduct Authority in contemporary days is one of the most substantial moves any global regulator has made against Binance. The cryptocurrency exchange has an extensive digital asset secure with subsidiaries around the world.
The business has until Wednesday evening to confirm it has complied with the watchdog’s demands.
The intervention is an emblem of regulators’ manners and the way they are cracking down on the cryptocurrency industry over concerns relating to its potential role in illicit activities such as money laundering and fraud, and over often weak consumer protection.
The United Kingdom Authority Financial Conduct Authority (FCA) delivered a consumer warning against both the Cayman Islands-registered Binance Holdings Company and Binance Markets Limited.
“Binance Markets Limited is not permitted to undertake any regulated activity in the UK and no other entity in the Binance Group holds any form of UK authorization, registration, or license to conduct a regulated activity in the UK.”
Binance in response said,
“It takes a collaborative approach in working with regulators and we take our compliance obligations very seriously. The FCA’s notice “has no direct impact on the services provided on Binance.com” since Binance Markets Limited is a separate entity.”
According to data from TheBlockCrypto,
“Binance is one of the most important operators in the fast-emerging crypto market, offering a wide range of services to customers around the world, including trading in dozens of digital coins, futures, options, stock tokens, as well as savings accounts and lending. It recorded crypto trading volumes equivalent to $1.5tn last month.”
Binance Markets Limited is not permitted and official under the Financial Conduct Authority cryptocurrency registration regime, which is required for UK groups offering digital asset services.
The entity had applied to become a registered cryptocurrency company with the regulator but pulled that application last month following intensive engagement from the FCA.
The Financial Conduct Authority’s focus in deciding whether or not to approve such applications is based on a review of controls and practices to prevent anti-money laundering and the financing of terrorism.
The regulator ordered Binance to spectacle the actions by next Wednesday on its website as,
“Binance markets Limited is not permitted to undertake any regulated activity in the UK. Binance Markets Limited also must secure and preserve all records and/or information relating to all UK consumers from its systems and halt any advertising and financial promotions.”
Although the Financial Conduct Authority has restricted Binance from offering services in the UK, British citizens can still access Binance’s services in other jurisdictions.
London-based Binance Markets Limited had permission from the FCA to provide consumers with investment services in traditional currencies, something Binance achieved by purchasing a financial company already registered with the regulator. The transaction was approved by the FCA last June, according to public documents.
While trading cryptocurrencies is not directly regulated in Britain, offering services such as trading in cryptocurrency derivatives requires authorization.
About 2.3m Britons hold cryptocurrencies notwithstanding warnings of risk.
Although there were no clear regulations by the regulator and he did not give details regarding the measures against Binance, which has said that it takes its legal obligations very seriously and engages with regulators and law enforcement in a collaborative fashion.
The Financial Conduct Authority is stepping up its oversight of cryptocurrency trading, which has soared in popularity in the UK alongside other countries. The FCA has essential for all firms offering cryptocurrency-related services to register and show they comply with anti-money laundering rules.
Sources
https://www.ft.com/content/8bc0e5e0-2705-496d-a265-acccaffaee87
