The UK financial regulator rejected an application from London-based Binance Markets to register as a cryptocurrency company in May. Over the weekend, it warned the British and the crypto exchange Binance itself that the activities of Binance Markets and other companies of the group for trading cryptocurrency in the country would be illegal.
It also issued a warning to consumers. Advising people to be wary of advertisements that promise high returns on cryptoasset investments.
The FCA said the UK-based crypto exchange Binance Markets “must not engage in any regulated activity without the prior written consent of the FCA”. The warning also states that “no other entity in the Binance group has any form of UK permit, registration or license to conduct regulated activities in the UK”.
In the order, the regulator listed the measures that the company must take by June 30, 2021:
– Post a notice of the ban in a conspicuous place on the website. Also other communication channels or on social networks;
– Remove or, if this is not possible, give instructions to remove all promotions that it is currently running;
– Provide written confirmation of the steps taken.
It must also ensure that all UK user records secured and stored and notified to the FCA by 2 July.
The regulator did not explain why it took these measures. Binance previously received a UK consumer license for traditional currencies. The company planned to open a division in the country for conducting cryptocurrency operations, isolated from business in other countries.
Note, however, that when making decisions on applications for registration of cryptocurrency companies, FCA relies on data from reports on the control and prevention of money laundering and terrorist financing.
Restrictions will not affect Binance
Binance representatives assured that the restrictions will not affect the operation of the project website. The crypto company stressed: Binance Markets has not officially worked in the UK for a single day. So there should not be any losses for local residents from the new ban. They can access the platform’s services in other jurisdictions. At the same time, Binance said they are using a collaborative approach in working with regulators. And are very sensitive to compliance obligations.
The company added that the FCA notice “has no direct impact on the services provided on Binance.com”. As Binance Markets is a separate entity. The British structure of the cryptoexchange hasn’t received registration for working with cryptocurrencies, which is carried out by the FCA. It applied to register as a cryptocurrency company with the regulator, but withdrew her in May.
The regulator confirmed that the application was rejected “after intensive interaction with FCA”.
The intervention of the British financial regulator was one of the most significant steps taken by the world’s regulators against Binance, a digital asset company with subsidiaries around the world.