Cryptocurrency exchange Binance does not have permission to carry out regulated activities in the UK, the Financial Conduct Authority warned consumers.
Binance, which is one of the world’s most popular cryptocurrency platforms that offers a range of services, is not allowed to offer derivatives or other regulated products in the UK, the watchdog said.
However, Brits are still allowed to buy, sell and hold cryptocurrencies on Binance’s platform, meaning that the Chinese-founded company’s activities in the country remain much the same as before.
This is because while digital assets businesses are required to register with the FCA under its temporary registration regime — a move that Binance has yet to complete — the watchdog has not yet determined how it will regulate cryptocurrencies themselves.
The FCA published the notice against Binance Markets, a UK business acquired by the wider Binance Group, on 26 June. It is a separate entity to Binance.com, where much of the group’s activity occurs and which is based with the main group in the Cayman Islands.
“Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA,” the regulator said.
“No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK.”
The FCA has requested that Binance comply with several requirements to continue operating in the country, including the display of a large notice on its website informing consumers of its unauthorised status.
“The Binance Group acquired BML [in] May 2020 and has not yet launched its UK business or used its FCA regulatory permissions,” said Binance in a statement on its Twitter account.
“Our relationship with our users has not changed. We take a collaborative approach in working with regulators and we take our compliance obligations very seriously.”
The news sparked a heated debate between advocates and critics of cryptocurrencies as to whether the decision marked a significant step by the FCA to crack down on the sector.
“This was an enforcement action and not guidance on any new policy,” said Mati Greenspan, chief executive of research firm Quantum Economics and prominent crypto investor. “[The FCA is] just stating for the record that Binance doesn’t yet have a license to offer leveraged products.”
Binance has previously faced regulatory heat in other jurisdictions, including most recently in Japan where the country’s Financial Services Agency warned the firm was conducting unauthorised cryptocurrency trading.
It also emerged earlier this month that previous FCA warnings on cryptocurrencies had largely gone unnoticed. The regulator published research which showed only 1 in 10 people who had heard of cryptocurrencies were aware of the consumer warnings on the FCA’s website.
“The FCA ordering Binance to immediately cease all regulated activities in the UK sends a clear signal not only to Binance but to the entire crypto market,” said Rabya Anwar, partner at Keystone Law.
“Other cryptocurrency exchanges and related market participants should watch closely, prepare carefully and be under no illusions – Binance is unlikely to be the only target.”
To contact the author of this story with feedback or news, email Emily Nicolle