As worldwide monitoring of the cryptocurrency business intensifies, the UK’s financial authority just made one of the most important regulatory measures to yet against Binance cryptocurrency exchange.
According to the Financial Conduct Authority(FCA), Binance Markets Ltd., an affiliate of leading global crypto exchange Binance, is no longer permitted to operate in the United Kingdom. Binance Markets Ltd has given ultimatum till the evening of June 30 to prove it has withdrawn all advertising and financial promotions. The exchange must also make it clear that it is no longer allowed to function in the United Kingdom on its website, social media channels, and other communications. Without prior written consent, Binance Markets will not be allowed to resume operations in the United Kingdom.
While the limits are aimed at a different legal company from Binance the world’s largest crypto exchange by turnover, the FCA proclamation mandates that the notification be posted on Binance.com and other communication channels, including the Binance mobile and desktop apps.
Reason for Binance crackdown in UK
The move is part of a broader regulatory assault on the cryptocurrency industry, which has been criticized for its possible participation in money laundering and fraud. Following intense interaction from the FCA, Binance withdrew an application pertaining to the 5MLD an anti-money laundering directive on May 17, according to the regulator, which further said that they had been working on the measures for some time.
Nick Saponaro the co-founder of the Divi Project in San Diego said that where blockchain is decentralized and borderless but the technologies that enable open and public blockchains are not. He further added that it feels like this has been a long time coming as some crypto firms operate in a murky region at best.
On Sunday, Binance Markets professed on Twitter that it does not sell any products or services via the Binance.com website. The Binance Group purchased BML in May 2020, but has yet to begin its UK operation or utilize its FCA regulatory permissions.
The move had little impact on cryptocurrency trade. Bitcoin was trading 6.8% higher at $34,854 as of 8:28 a.m. in London on Monday. According to CoinGecko pricing, Binance Coin, which has the fourth-largest market value among cryptocurrencies and can be used to trade crypto and pay fees on Binance is up by 2.8 percent in the last 24 hours.
We take a collaborative approach in working with regulators and we take our compliance obligations very seriously.— Binance (@binance) June 27, 2021
We are actively keeping abreast of changing policies, rules and laws in this new space. (4/4)
Hard regulatory action is generally interpreted by crypto bulls as a sign that the industry is maturing, and the prospect of a more solid safety net may entice additional investors.
The co-founder of the Divi Project in San Diego Saponaro don’t necessary think that this particular event has net negative impact to crypto industry, but he firmly believes that it demonstrates increasing maturity of the crypto world.
Binance Markets was ordered by the FCA to withdraw, or give directions for the removal of, any current advertising and financial promotions. According to the statement, the FCA also instructed the firm to safeguard and retain all records relating to UK consumers so that they can be delivered to the authority, or a person specified by the FCA, quickly on its request.
According to an FCA spokesperson, a substantially high percentage of crypto asset enterprises are failing to achieve the required criteria under money laundering legislation, resulting in an unprecedented number of businesses withdrawing their applications.
Following the FCA’s intervention, more than 90% of the enterprises have withdrawn their applications.
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The Authority has regularly cautioned customers about the dangers of cryptocurrency trading. In January the FCA issued the notice suggesting that investors should expect to lose all of their money. It outlawed the selling of crypto derivatives to retail clients last year, claiming that they had no value for regular investors, despite the fact that the underlying cryptocurrencies were not regulated. European regulators have also tightened restrictions on the types of crypto services that can be marketed to the public.
At a City & Financial Global conference last week, Mark Steward, the FCA‘s head of enforcement and market oversight said that there are over 100 crypto businesses operating in the UK that haven’t even applied for registration. Mark furthermore added that around 2.5 million adults in the United Kingdom own crypto assets, with many of them utilizing credit to do so. He described it as absolute madness written all over it.
Several US government authorities are looking into Binance. Binance is being investigated by the Commodity Futures Trading Commission to see if it permitted Americans to place wagers that were illegal in the United States. The Justice Department and the Internal Revenue Service are looking into the transaction, but they haven’t accused anyone of wrongdoing.
Binance was also recently handed a warning by Japan’s Financial Services Agency, which said it provided crypto services without requiring registration.