UK bans Binance cryptocurrency trading in the country

A source: Reuters

The UK Financial Conduct Authority (FCA) announced the inadmissibility of the activities of one of the largest cryptocurrency exchanges in the world, Binance and its divisions in the country, and warned users of the cryptocurrency trading platform about this. 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, writes The Financial Times.

The FCA stated that the UK company Binance Markets “must not, without the prior written consent of the FCA, exercise any regulated activities “. The alert also states that “no other entity in the Binance group has any UK form of permit, registration or license to conduct regulated activities in the UK. “

On his website and on social media channels, the exchange must advise that Binance Markets is not authorized to operate in the UK. It must also ensure the security and storage of all UK user records and inform the FCA by July 2, Reuters said. The regulator did not explain why it took these measures.

Binance responded by saying it takes a “collaborative approach with regulators” and “takes compliance very seriously”. 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 crypto exchange has not received registration for working with cryptocurrencies, which is carried out by the FCA. She applied to register as a cryptocurrency company with the regulator, but withdrew her in May, writes FT, citing two interlocutors familiar with the situation. The regulator confirmed that the application was rejected “after intensive interaction with FCA.”

As noted by the FT, 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.

London-based Binance Markets has been authorized by the FCA to provide investment services to consumers in traditional currencies. Binance achieved this by purchasing a financial company that was already registered with the regulator. The deal was approved by the FCA in June 2020, according to open documents. Since January, the FCA has required all companies offering cryptocurrency-related services to register and show that they comply with anti-money laundering regulations, Reuters reports. According to the regulator, at the beginning of June, only five companies were registered, most of them have not yet met the requirements.

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Binance is one of the key operators in the fast-growing crypto market. It offers a wide range of services to clients around the world, including trading dozens of digital coins, futures, options, stock tokens, as well as savings accounts and lending. According to The Block Crypto, in May, cryptocurrency trading volumes amounted to the equivalent of $ 1.5 trillion. Binance Markets was created a year ago with a plan to launch the UK-oriented exchange Binance UK, which would be “fenced off” from global operations, notes with reference to public documents and two FT interlocutors. Although the FCA has restricted Binance from providing services in the UK, British citizens can access Binance’s services in other jurisdictions.

Last week, the Japanese financial regulator (Financial Services Agency) warned that Binance was carrying out unauthorized cryptocurrency trading with Japanese citizens. The Japanese regulator issued a similar warning to the exchange in 2018. In April, a German regulator warned investors that Binance had violated securities regulations when it launched stock token trading. The Exchange was unable to appeal this decision. BaFin said the exchange risks being fined for offering digital tokens without an investor prospectus, Reuters said.

In May, Bloomberg reported that officials from the U.S. Department of Justice and the Internal Revenue Service investigating money laundering and tax crimes had requested information from individuals with knowledge of Binance’s business.

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