Binance issues clarification about FCA trading ban
Crypto exchange responds to finance regulator’s notice to stop regulated activity
Cryptocurrency exchange Binance has updated its website and app with a notice about Binance Markets ltd (BML) as requested by the UK’s Financial Conduct Authority (FCA).
BML was told to stop all its regulated activities in the UK last Sunday by the FCA and that it must cease all regulated activities with “immediate effect”.
The financial watchdog pointed out that while it did not regulate cryptoassets, such as bitcoin or ether, it did regulate certain cryptoasset derivatives, such as futures contracts, contracts for difference and options, as well as those cryptoassets it considered to be securities.
Binance response to FCA
In a statement on its website, Binance sought to reassure users of the exchange. It said it had been aware of some confusion in the community and wished to provide clarity on the situation.
Binance stressed BML was a separate legal entity and did not offer any products or services via www.binance.com.
The statement continued: “The FCA notice applies only to BML, as the entity is regulated by the FCA. The FCA notice requires BML to seek prior written consent of the FCA in order to undertake any regulated activities in the UK.
”The FCA notice does not apply to the products and services provided through www.binance.com, nor does it change any arrangement with our users.”
In addition, Binance has added a risk warning. “Cryptocurrency trading is subject to high market risk. Please make your trades cautiously. Binance will make best efforts to choose high-quality coins, but will not be responsible for your trading losses,” it said.
Binance is a currency exchange that launched in 2017. It provides a trading platform for more than 150 cryptocurrencies and virtual tokens, including bitcoin (BTC), ether (ETH), litecoin (LTC), dogecoin (DOGE), and its own binance coin (BNB).
Regulators’ piecemeal approach
Carol Alexander, professor of finance at the University of Sussex, said the approach of regulators to cryptocurrencies had so far been “piecemeal”.
She said: ”Crypto is like a hydra – it just grows more heads even when regulators achieve a modicum of success in the courts.
“To be truly effective, there needs to be regulation for all crypto players so there is no room for uncertainty about who will bring an action and how they will tackle the worst market abuses.”