The UK had decided to ban all activity of the world’s largest cryptocurrency exchange, Binance, in the country. This means that the UK division of Binance, Binance Markets Limited, will no longer be permitted to undertake any regulated activity.
Binance was founded in July 2017 by Changpeng Zhao as a platform for crypto trading. The platform originally worked on the ethereum blockchain before the native currency of Binance’s own blockchain, the Binance Chain, was created. The online exchange supports most commonly traded cryptocurrencies and virtual tokens such as Bitcoin, Ether, Dogecoin, as well as more than 150 others. Binance users are given a crypto wallet to hold their electronic funds where they can either keep their funds stored or trade them with other users. This year alone, Binance has processed trillions of dollars in cryptocurrency trades.
Starting on June 30, the UK will no longer permit Binanced Markets Limited meaning that withdrawals or deposits with the British Pound are not allowed either. The platform is now required to display this message to all UK users:
BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE U.K. Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. (No other entity in the Binance Group holds any form of U.K. authorization, registration, or license to conduct regulated activity in the U.K.).
The company had planned on launching its digital asset marketplace in Britain but the application was withdrawn following the crypto firms’ inability to meet the FCA’s anti-money laundering requirements meaning that they could not prove their ability to screen out criminal users and flag suspicious transactions. While Binance Markets Limited is no longer able to offer regulated services in Britain, Binance could still offer Brits crypto trading since non-registered firms still have the ability to interact with UK consumers.
On June 27, Binance Tweeted: “We are aware of recent reports about an FCA UK notice in relation to Binance Markets Limited (BML)… BML is a separate legal entity and does not offer any products or services via the Binance.com website.” Binance firmly believes that they have what they need to block any illicit activity from its systems and meet FCA requirements. In a statement to the Financial Times, a Binance spokesperson said “We take our legal obligations very seriously and have worked hard to build a robust compliance programme,” showing their dedication to solving this issue.
Will this regulatory scrutiny affect other cryptocurrencies? Will other regulators follow in the FCA’s footsteps cracking down on cryptocurrency companies?
Browne, Ryan. “Binance, the World’s Largest Cryptocurrency Exchange, Gets Banned by UK Regulator.” CNBC, CNBC, 28 June 2021, www.cnbc.com/2021/06/28/cryptocurrency-exchange-binance-banned-by-uk-regulator.html.