Binance is not allowed to operate in the UK, warns FCA

Rick Steves

The Binance Group acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions

The Financial Conduct Authority has announced Binance Markets Limited, a subsidiary of Binance Group, is not permitted to undertake any regulated activity in the United Kingdom.

Binance is one of the world’s largest cryptocurrency exchanges and creator of two of the largest cryptos: Binance Coin (BNB) with a market cap of $44 billion and Binance USD (BUSD) with a market cap of $10 billion.

The UK’s financial watchdog has imposed a ban on crypto derivatives that took effect by the end of March 2021. Binance offers derivatives trading on cryptocurrencies, which led the regulator to warn consumers and the firm that its operation is banned in the jurisdiction.

“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 UK authorisation, registration or licence to conduct regulated activity in the UK. The Binance Group appear to be offering UK customers a range of products and services via a website, Binance.com.”

The operator has replied on Twitter to the warning in the form of a 4-part thread: “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 website.

“The Binance Group acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions”, the firm stated, adding the “FCA UK notice has no direct impact on the services provided. Our relationship with our users has not changed.”

“We take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules and laws in this new space”.

The FCA does not regulate cryptoassets, but is the UK’s authority on certain cryptoasset derivatives (such as futures contracts, contracts for difference and options), as well as those cryptoassets that can be considered securities.

The Financial Conduct Authority (FCA) estimates that 2.3 million adults now hold cryptoassets (up from 1.9 million last year) in the United Kingdom – which is a 21% rise YoY -, with 78% of adults having heard of cryptoassets.

A survey conducted by the FCA suggests that the majority of the growing number of cryptocurrency holders had a positive experience so far and is likely to buy more in the future as they regard them less as a gamble. The FCA, however, seems to have discouraged half of the consumers aware of warnings on the regulators’ website.

The consumer research shows 38% of crypto users regard them as a gamble (down from 47% last year) while increasing numbers see them as either a complement or alternative to mainstream investments.

Over half of crypto users have had a positive experience so far and are likely to buy more (rising from 41% to 53%), according to the research. Regretful consumers have declined from 15% to 11%.

Only ten percent of those who have heard of cryptocurrencies are aware of consumer warnings on the FCA website, and 43% of these said they were discouraged from buying crypto.

Most consumers recognise that crypto investments are not protected, although 12% of crypto users believe otherwise.

 

Read this next

Digital Assets

Despite its legal troubles in the US, Ripple expands elsewhere

Ripple is looking to expand its presence in the MENA region, forming a new partnership with Pyyp, a global blockchain-based financial services technology company. The latter has reportedly joined Ripple’s On-Demand Liquidity (ODL) network, which, among many benefits, allows it to bring instant, low-cost remittances to its customers.

Digital Assets

Ripple’s string of wins analyzed, XRP lawsuit to drag on until Spring 2022

“Absent a settlement, this case will not be decided until March 2022 at the earliest and possibly not even until late spring if the court decides not to rule on some of the pending motions until after the discovery deadline, which looks really possible”.

Industry News

Stripe partners with BNPL giant Klarna

Stripe, one of the largest payment providers in the world, has announced the launch of a partnership with the BNPL giant Klarna which might prove to be a game-changer as far as the buy-now-pay-later industry is concerned.

Retail FX

ADSS’ UK business reports £3.09 million in 2020 revenues, down 38%YoY

ADSS’ FCA-regulated entity reported its financial results for the year ending December 31, 2020. The company posted a revenue figure that was 38 percent lower than the amount it earned in the fiscal year of 2019.

Retail FX

OANDA hires FX Global Code contributor Lisa Shemie as General Counsel

Lisa Shemie was Chief Legal Officer at Cboe and was part of several working groups under the Global Foreign Exchange Committee, which is responsible for the FX Global Code.

Digital Assets

Saxo Bank boosts Crypto FX offering after $2.5b in turnover since May

Saxo increased maximum position limits and several new crypto instruments, including the first ever US Crypto ETF issued by Proshares last week under ticker BITO.

Digital Assets

Tether tests Notabene for AML in cross border transactions

The Financial Action Task Force (FATF) has issued guidelines holding VASPs to the same standards as regulated financial institutions.

Digital Assets

Mobilum upgrades OTC crypto desk for trades above $50,000

Mobilum added a wide variety of crypto assets, fast settlements, no deposit or withdrawal fees, competitive trading fees, and a personalized service with human traders.

Digital Assets

Trakx launches digital asset trading platform in France

Crypto Traded Indices (CTIs) enhance portfolio diversification and reduce the complexity and fees associated with the setting and reach of positions on many digital and cryptocurrency assets.

<