Finance

Binance targeted by Italian regulator as global crypto scrutiny heats up

Italian banking regulator Consob has warned consumers that Binance is not authorised to conduct regulated investment services and activities in the country, joining a chorus of watchdogs around the world in clamping down on cryptocurrency usage.

Warnings against Binance have been published by regulators in the UK, Japan, the Cayman Islands, Malta and Thailand in the last month, all of which stated the firm is not licensed to carry out services such as derivatives and spot trading in their jurisdictions.

The UK’s Financial Conduct Authority said its warning pertained to a recently acquired British unit named Binance Markets Limited, which a spokesperson for Binance said was separate to its website Binance.com.

Consob said Binance is not authorised to provide services in the country at all, “not even through its website”.

A Binance spokesperson said the firm is “aware of the notice from Consob and can confirm that Binance.com does not operate out of Italy. This has no direct impact on the services provided on Binance.com.”

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Watchdogs have pushed out harder messaging stressing the risks inherent in cryptocurrencies as adoption becomes more widespread.

In the same 15 July statement, Consob warned that consumers should “adopt the utmost caution in making transactions on instruments related to cryptoassets”, which could put them at risk of losing all their money.

The regulator said any consumers wishing to purchase cryptocurrencies should only do so with an “adequate understanding” of the risks involved, and where there is a “clear and complete” picture of the identity of the service provider they are using.

Similar cautionary statements have been made by the FCA and other regulators on cryptocurrencies. The UK watchdog said earlier on 15 July that it planned to spend £11m on a digital marketing campaign to spread the word about the potential harm of crypto investing.

“That the FCA is still raising concerns around crypto is not a surprise,” said Claire Simm, managing director for financial services compliance and regulation at Kroll.

“Innovation such as crypto still carries risk, and the focus will be on communication; to use a crypto exchange it doesn’t have to be located in the UK, so the best tool the FCA has is communication.”

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Data revealed by Financial News showed that bitcoin is the preferred snare for online scammers using paid-for adverts to target unsuspecting Brits, accounting for 95% of all alerts flagged by the Advertising Standards Authority in the last year.

Despite the regulatory heat, banks and institutional investors have pushed ahead with plans to offer clients access to cryptoassets.

Goldman Sachs, Morgan Stanley and BNY Mellon are among the banks with plans to provide investment vehicles for bitcoin and ether, while London gained its first bitcoin ETF earlier this year.

To contact the author of this story with feedback or news, email Emily Nicolle

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