Binance has been the largest crypto exchange in the whole world. However, although not minding its reputation, the UK Financial Conduct Authority (FCA) has banned it from operating in the country.
According to the regulatory body, Binance is no longer permitted to carry out regulated activities in the country from June 30, 2021.
“BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE U.K.”
British residents who expected to utilize the cryptocurrency exchange platform to engage in derivatives trading may no longer access it. Speaking with CNBC, the Binance spokesperson stated:
“The FCA U.K. notice has no direct impact on the services provided on Binance.com … 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,” the spokesperson added. “We are actively keeping abreast of changing policies, rules and laws in this new space.”
However, crypto trading might still be possible since such activities are unregulated. But, the financial watchdog has warned the Brits against unregulated players and encourages them to withdraw their assets from such companies.
Apart from the recent UK action, financial regulators in the USA, Japan, and Canada have also been probing the exchange for not complying with regulatory requirements. The US Security and Exchange Commission also took the same action against Binance last April 2021.
Background Of The Binance Ban
The Financial Conduct Authority requires every company offering financial services in the UK to register with them. The cryptocurrency exchange has not fulfilled this requirement and, as such, cannot operate in the country.
Binance and many other crypto exchanges submitted their applications to the FCA to launch digital assets in the British market. However, many of the exchanges, including Binance, withdrew the applications. The reason was that they couldn’t meet the FCA’s anti-money laundering requirements.
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Binance specifically withdrew its application on May 17, 2021. However, according to the FCA’s spokesperson, Binance has been under the watchdog’s radar for quite some time now.
So, the decision to ban them from conducting regulated activities in the UK market is not a spontaneous one. They also stated that the ban didn’t cover every Binance’s activities in the market.
The cryptocurrency exchange might still provide crypto trading services to British residents through its official exchange, which is not based in London.
Regardless, the financial regulator forbids the cryptocurrency exchange from establishing a crypto exchange in the UK. Also, they’ve given directives for the UK division to close down every advertisement going on in the country by June 30, 2021.
What Does The Ban Mean For The Crypto Industry?
From the recent actions against Binance by financial regulators, the crypto industry must prepare for more regulatory battles with the authorities. Before the UK ban, the USA SEC has been probing the exchange for tax and money laundering accusations.
Binance even disclosed that it is halting its activities in Ontario, Canada. The Ontario Securities Commission accused Binance and other cryptocurrency exchanges of not abiding by laid down regulations to operate in the country.
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Also, the cryptocurrency exchange received another warning from the Financial Service Agency in Japan for its unauthorized operations in the country. All these pressures from the regulatory authorities are shaking the foundation of what cryptocurrency and blockchain technology represents.
The cryptocurrency industry aims at facilitating transactions without the interference of third parties or intermediaries. Now, mandating the operators to operate based on financial regulations is becoming a worry for crypto enthusiasts.
Despite the ban, the Binance Coin (BNB) shows resilience and seems to be recovering from the dreadful last week.
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