Why London rejects the Binance cryptocurrency platform
by Marco Dell’Aguzzo
The UK regulator has banned transactions on Binance, one of the largest cryptocurrency exchange platforms in the world. The details
The UK’s financial regulator (FCA) has banned transactions on Binance, one of the world’s largest cryptocurrency exchange platforms.
WHAT IS BINANCE
Binance was founded in 2017 in China by Changpeng Zhao and Yi He; it subsequently moved its headquarters to the Cayman Islands to escape the Chinese cryptocurrency squeeze, which was deemed a cause of instability for the financial system.
THE FCA DECISION
In a note dated June 25, the FCA said Binance Markets Ltd – the subsidiary of the company that operates in the United Kingdom – cannot carry out any regulated activity in the United Kingdom without the prior written consent of the authority.
Reuters explains that cryptocurrency trading is not directly regulated in the UK, but offering cryptocurrency derivatives trading services requires authorization.
The FCA’s decision takes effect immediately, but the reasons for it have not been explained.
WHAT BINANCE SHOULD DO
The FCA has issued a warning to consumers on the risks associated with the services of Binance Markets and, more generally, the entire Binance group.
By June 30, Binance will also have to post a message on its website and social media profiles to make it clear that Binance Markets Ltd is not authorized to carry out any regulated activity in the UK. The company will also need to secure and maintain all UK customer records and notify the FCA by 2 July.
In a statement, Binance said the FCA’s move will not impact the services offered on the Binance.com site. British citizens in jurisdictions other than domestic will still be able to transact on the platform.
HOW ARE THE PRICES OF CRYPTOCURRENCIES
Milano Finanza writes that the FCA decision did not negatively affect the prices of cryptocurrencies: Bitcoin “gains 4.33% and returns to $ 34,527, while Ethereum recovers 6.91% and is close to the psychological threshold of 2,000 (1,985 dollars) “.
ANTI-MONEY LAUNDERING CONTROLS, NOT ONLY IN THE UK
The FCA is stepping up its monitoring activities on cryptocurrency trading, an activity that has become very popular in the UK as in many other countries around the world. Last January, the British authority requested all entities offering services related to cryptocurrencies to register and demonstrate compliance with anti-money laundering regulations. So far, only five companies have registered and most of them are not in good standing.
The Binance squeeze isn’t just about the UK. On June 25, the Japanese financial regulator said the company was operating illegally in the country. In April, the German authority BaFin said that Binance was in danger of being fined for offering “digital tokens” without publishing an investor prospectus.