UK regulator reiterates ban on Binance UK business

August 25, 2021 5:42 pm UTC, abdelaziz Fathi

Binance is now making efforts to gain the trust of regulators across the globe. Not enough for the UK FCA, which has banned the trading of crypto derivatives earlier this year.

The City watchdog today published an update to its previous warning against the world’s biggest cryptocurrency exchange. According to it, Binance Markets Limited, the UK division of Binance, has complied with all the requirements imposed by the FCA.

“On 25 June 2021, the FCA imposed requirements on Binance Markets Limited. The firm complied with all aspects of the requirements. See our Supervisory Notice. See the FCA Register for any requirements that apply to the firm,” the regulator said.

“These requirements remain in place and BML are still unable to conduct regulated business in the UK”.

The announcement comes as a blow to Binance’s efforts to comply with the regulators’ demands across the globe. The cryptocurrency exchange has recently shut down its futures and derivatives business across Europe, as well as Hong Kong, and Australia, as a “proactive” measure, according to Binance CEO Changpeng Zhao.

In addition to stopping its derivatives business while unregulated by financial watchdogs, the exchange operator hired top compliance specialists as part of its move to extend an olive branch to government agencies. This includes the appointment of Richard Teng as CEO of the Singapore operation and Manuel Alvarez in the United States.

In regard to the United Kingdom, the FCA has enforced a ban on crypto CFDs and other derivatives targeting retail traders earlier this year, which pushed many newcomers such as Bybit as well as industry leaders such as IG out of that market.

Cryptoasset firms may still be registered with the FCA via a temporary regime. This regime was extended in June to address the fact that a significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations resulting in an unprecedented number of businesses withdrawing their applications.

Binance too was unable to meet the AML requirements set up by the FCA. This becomes clear in the regulator’s letter to Binance Markets Limited, the group’s UK arm, pointing out the firm ‘refused’ to respond to basic questions including the ones relating to money laundering, organizational structure, and even the legal entity in charge of its product offering.

“The FCA considers that firm’s responses have been incomplete and have included direct refusals to provide information.”

Binance issued a more optimistic statement regarding its relationship with the UK regulator: “As noted by the FCA, Binance Markets has fully complied with all aspects of its requirements. We continue to engage with the FCA to resolve any outstanding issues.

“As the cryptocurrency ecosystem industry continues to grow and evolve we are committed to working with regulators and policymakers to develop policies that protect consumers, encourage innovation, and move our industry forward”, it added.

As of June 30, Binance was obliged to add a notice in a prominent place in its website and apps informing Brits that it’s not approved to offer them any services.

At the time, Binance clarified that the FCA notice would have no direct impact on the services it provides in the country from its website Binance.com.

“BML is a company incorporated in the UK and regulated by the FCA. BML is a separate legal entity and does not offer any products or services via www.binance.com. 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”, said Binance at the time.

The exchange also explained that the regulator requires BML to seek prior written consent in order to undertake any regulated activities in the UK.

While the influential platform was technically allowed to continue offering trading to UK users, it was one of several crypto exchanges that were ordered to withdraw applications to register with the FCA due to not meeting anti-money laundering requirements.

CZ previously revealed that he expects Binance to face heavy scrutiny in the future as the leading exchange is shifting from “a tech startup to a financial service.” He said that while announcing that the US arm of the global platform is considering an initial public offering (IPO) despite the ongoing regulatory crackdown.

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UK regulator reiterates ban on Binance UK business

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