UK bans the world’s biggest cryptocurrency exchange, Binance

The world’s largest cryptocurrency exchange has been banned from operating in the UK and has until Wednesday to comply with the ruling by the financial watchdog.

Cayman Islands-based Binance, which allows customers around the globe to trade cryptocurrencies like Bitcoin and derivates linked to them, such as futures, was told to stop ‘any regulated activity’ in the UK under its affiliate Binance Markets Limited.

The move by the Financial Conduct Authority is the latest crackdown on the crypto industry.

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Various regulators are growing increasingly concerned about cryptoassets’ potential role in illegal activities like money laundering, as well as poor protection for investors as they become more popular.

Due to the ban, Binance Markets ‘is not currently permitted to undertake any regulated activities without the prior written consent of the FCA’, the watchdog said.

The FCA does not regulate cryptocurrencies themselves, but it does regulate financial products linked to them, which is presumably the activity the FCA is clamping down on.

Laith Khalaf, financial analyst at AJ Bell, said: ‘The Binance website offers derivative products with up to four times leverage on a range of extremely volatile cryptocurrencies, which means gains, and losses, are magnified by a factor of four.

‘It’s not surprising that such extremely risky products have drawn regulatory scrutiny.’

Since January, the FCA has introduced a ban on the sale of derivates and exchange-traded notes that track cryptocurrencies like bitcoin and ethereum to retail investors after it concluded that they are at risk of ‘sudden and unexpected’ losses.

The regulator also introduced the requirement for all firms offering cryptocurrency-related services to register with them and show they comply with anti-money laundering rules.

Binance had applied to become a registered company with the FCA – but it dropped its application last month. That means it cannot operate as a cryptocurrency exchange in the UK.

Earlier this month, the FCA said that just five firms had registered, and that the majority were not yet compliant.

What does the ban mean for UK customers with a Binance account?
It is not clear what that means for UK investors.

While Binance cannot offer a crypto exchange based in the UK, British investors can still access the group’s services through its website

Binance said the FCA UK notice had ‘no direct impact’ on the services provided on

‘BML is a separate legal entity and does not offer any products or services via the website,’ the group tweeted.

And added: ‘We take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules and laws in this new space.’ Continue Reading

News – Centapost

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