Binance’s foreign arm is beyond the reach of the Financial Conduct Authority.
The UK’s top financial authority has decided that Binance cannot function in the country, although crypto traders in the UK can continue to utilize the exchange.
Confused? We were perplexed as well, so we contacted the Financial Conduct Authority and requested them to explain a few points.
According to an FCA spokeswoman, the prohibition solely applies to Binance Markets Limited, Binance’s English incorporation, which Binance has not registered with the FCA (despite plans to do so).
The representative clarified that “UK consumers can continue to interact” with Binance Group, which is a larger, multinational collection of Binance enterprises with no official headquarters. This implies that consumers in the United Kingdom can continue to trade on Binance as usual.
This distinction is crucial, and it explains why, despite the FCA’s ban on crypto derivatives in January, Binance has continued to offer margin and derivatives trading to UK customers.
“Binance is now serving consumers in the United Kingdom. Binance Markets Limited is not the source of the message “we spoke with a Binance customer service representative.
The FCA is taking a “close look” at how the larger group interacts with UK consumers, but it’s up to Binance to “ensure they understand all applicable regulatory requirements in the nations where they operate,” according to the spokeswoman.
Binance Markets Limited will soon launch Binance.UK, a localized version of Binance that will allow British residents to register virtual bank accounts. It was meant to go live last summer, but the FCA never approved it.
While crypto firms that haven’t registered with the FCA are still permitted to service UK consumers, they have been required to apply for registration since January and must complete it by March of next year.
Binance Markets Limited is one of the 90% of crypto companies who have withdrew their FCA registration applications. “Following rigorous engagement from the FCA,” Binance withdrew its application on May 17.
The FCA did not explain why Binance Markets Limited withdrew its application, but it did note that other companies withdrew because they did not meet the FCA’s stringent anti-money laundering rules.
Binance Markets Limited must stop advertising to UK consumers and collect data on them, according to a warning issued by the Financial Conduct Authority on Friday.
Binance must also announce on its website and social media channels by Wednesday that “BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK.”
Binance users were alerted by Japan’s Financial Services Agency two days ago that the exchange had not registered with the authority. Binance was declared illegal by the Malaysia Securities Commission this summer, but the business has continued to operate in Malaysia.