The British financial regulator has ordered Binance to stop all regulated activities in the UK and severely condemned one of the world’s largest cryptocurrency exchanges.
The intervention of the Financial Conduct Authority in recent days is one of the most important measures taken by global regulators against Binance, which is a large digital asset company with subsidiaries around the world. The exchange must confirm by Wednesday night that it has complied with regulatory requirements.
This intervention shows that regulators are cracking down on the cryptocurrency industry because they are concerned about the potential role of cryptocurrencies in illegal activities such as money laundering and fraud, and consumer protection is often weak.
FCA also issued a consumer warning this weekend to Binance Holdings, a company registered in the Cayman Islands, and Binance Markets Limited. Binance Markets Limited is a subsidiary company headquartered in London. It is controlled by CEO Changpeng Zhao and supervised by British regulators.
“Binance Markets Limited is not allowed to carry out any regulated activities in the UK,” FCA said, adding, “No other entity in the Binance Group holds any form of UK authorization, registration or license to carry out regulated activities in the UK .”
The group did not immediately respond to a request for comment from the Financial Times, but it has previously stated that it “takes very seriously its compliance obligations and is committed to complying with the requirements of local regulators wherever we operate”.
Binance Markets Limited has not been approved by the FCA’s cryptocurrency registration system, which is required by the British group that provides digital asset services.
According to two people familiar with the matter, the entity has applied to the regulator to become a registered cryptocurrency company, but the application was withdrawn last month. The regulator confirmed that the application had been revoked “after the intensive participation of the FCA.”
FCA’s decision to approve such applications is based on the review of controls and practices to prevent money laundering and the financing of terrorism.
Binance is one of the most important operators in the rapidly emerging crypto market, providing A wide range of Services provided to customers around the world include trading dozens of digital currencies, futures, options, stock tokens, and savings accounts and loans. According to TheBlockCrypto’s data, the encrypted transaction volume it recorded last month was equivalent to 1.5 trillion U.S. dollars.
As part of the FCA action, the regulator required Binance to display on its website before next Wednesday: “BINANCE MARKETS LIMITED does not allow any regulated activities in the UK.” Binance Markets Limited must also “protect and keep all records and/or Information…be associated with all British consumers from its system” and stop any advertising and financial promotions.
According to public documents and the two men, Binance Markets Limited was established a year ago as part of the broader group’s plan to launch a UK-focused exchange, Binance UK, which will be “isolated from the broader global business” “Familiar with this matter. Although the FCA restricts Binance’s services in the UK, British citizens can still access Binance’s services in other jurisdictions.
London-based Binance Markets Limited has obtained a license from the FCA to provide consumers with investment services in traditional currencies. Binance achieved this goal by acquiring a financial company that has been registered with a regulatory agency. According to public documents, the transaction was approved by the FCA in June last year.
The FCA’s decision was made after the Financial Services Agency of Japan warned last week that Binance had conducted unauthorized cryptocurrency transactions with Japanese citizens. This is the second time the FSA has issued a warning to Binance after issuing the same notice in 2018.
Reporters about this story can be contacted by email email@example.com firstname.lastname@example.org or Telegram @adamsamsonFT @staffordphilip
Additional reporting by Robin Harding in Tokyo