The FCA Bans Binance From Undertaking Regulated Activities In The UK

The United Kingdom’s markets regulator, the Financial Conduct Authority, has banned Binance Markets Limited (BML), which is part of the Binance Group, from running any regulated activities in the country. The regulator announced this news on June 26, saying BML must seek written before offering any regulated products.

Reportedly, FCA also directed Binance to add a visible notice on its website, informing US citizens that it is not allowed to offer any regulated services in the country starting June 30. While the markets watchdog said no other entity within Binance Group holds any form of authorization or registration in the country, this ban will not affect the entire organization. As such, Binance will still be able to offer Brits crypto trading services through its website.

This ban comes after Binance failed to meet the FCA’s anti-money laundering requirements. As a result, Binance Markets Limited withdrew its 5MLD application on 2021年5月17日, prompting the regulator to clamp down on its operations. According to FCA’s spokesperson, this action against BML was within sight for quite some time.

Striving to remain compliant

Following the ban, Binance took to Twitter to assure its British customers that there is nothing to worry about. According to the firm, BML is a separate legal entity, and that it does not offer any products through Binance’s website. The company went on to note that its relationship with Brits would remain the same, seeing as the ban will not impact any services it offers through its website.

Explaining why BML’s ban will not affect other operations, Binance said it acquired the company in 2020 and that it had not yet launched its business in the US or used its FCA regulatory permissions. Binance added that it strives to collaborate with regulators and that it takes its compliance duties very seriously. On top of this, Binance claimed that it is actively keeping tabs on evolving policies, rules, and laws in the crypto space.

In the spirit of remaining compliant, Binance has indeed published a statement on its UK website saying,

“BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITIES IN THE UK.”

The company also pointed out that it will seek prior written permission from the FCA before launching in the country and carrying out any regulated activities.

The FCA continues tightening clampdowns on crypto

While the FCA does not regulate crypto assets such as Bitcoin (BTC) and Ether (ETH), the ban on BML focuses on prohibiting the unregulated offering of derivatives. In the notice informing about BML’s ban, the watchdog urged Brits to be cautious of online adverts that promise high returns on investments in cryptocurrencies and related products.

The agency noted that it had not authorized most firms that advertise cryptocurrencies. As such, investors in crypto products offered by such companies will not have access to the Financial Ombudsman Service or the Financial Service Compensation Scheme if their investments go south.

By banning BML, the FCA has joined other regulators that are moving to restrict Binance from offering products in their jurisdictions. For instance, Japan’s Financial Services Agency (FSA) warned that Binance is not authorized to operate in the country. However, a Binance spokesperson said the company does not have any active exchange operations in the country, adding that it does not solicit Japanese customers.

Apart from the FSA, the US DoJ and IRS recently investigated Binance over money laundering and tax evasion. The US Commodity Futures Trading Commission (CFTC) also probed Binance in March to determine whether it allowed Americans to conduct trades that violated US rules.