Binance Markets Limited banned by the Financial Conduct Authority
Binance is not permitted to undertake any regulated activity in the UK
The Financial Conduct Authority (FCA) has told Binance Markets Limited (BML) to stop all its regulated activities in the UK.
In an announcement over the weekend, the FCA, which is one of the UK's chief financial regulators, said Binance Markets must cease all regulated activities with “immediate effect”.
The FCA pointed out that while it did not regulate cryptoassets like Bitcoin or Ether, it did regulate certain cryptoasset derivatives, such as futures contracts, contracts for difference and options, as well as those cryptoassets they would consider “securities”.
It added: “A firm must be authorised by us to advertise or sell these products in the UK – check our register to make sure the firm is authorised. You can also check our warning list of firms to avoid.”
The FCA pointed out most firms advertising and selling investments in cryptoassets are not authorised by them. ”This means that if you invest in certain cryptoassets, you will not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong.”
Binance told the BBC News website the FCA notice has no “direct impact” on the services it provides from its website Binance.com.
”BML is a separate legal entity and does not offer any products or services via the Binance.com website,” the company said via Twitter. ”The Binance Group acquired BML in May 2020 and has not yet launched its UK business or used its FCA regulatory permissions.”
Nick Saponaro, co-founder and cio at crypto promotion platform Divi, said the FCA’s actions were necessary and that cryptocurrency would have to surrender itself to regulation in order to evolve.
He said: “While blockchain may be decentralised and borderless, the technologies built to support open and public blockchains are not.
“Is this event a net-negative for the space? No, I think it shows maturity. Regulation was a given, which may come as a disappointment to crypto die-hards but the writing has been on the wall for years.
“Those that work within these boundaries will become the Amazons, Googles and Facebooks of tomorrow, while the edgier projects may find it increasingly difficult to operate.”