- The UK’s financial regulator says Binance is not allowed to conduct any regulated activity in the country
- Binance is required to put a notice on its website and social media channels outlining the requirement and must also preserve all records for UK users
- The decision by the FCA is part of a wider effort to step up its oversight of cryptocurrency trading
- Earlier this year, Japan said Binance was operating illegally while Germany said it risked being fined for offering digital tokens without a prospectus
The UK’s financial regulator has said Binance, one of the world’s largest cryptocurrency exchanges, is not allowed to conduct any regulated activity in the country and issued a warning to consumers about the platform.
The Financial Conduct Authority (FCA) said in a notice, dated June 25, that Binance “must not, without the prior written consent of the FCA, carry out any regulated activities… with immediate effect.”
Binance announced in June last year that it had purchased an FCA-regulated entity — now Binance Markets Limited — that it would use to offer cryptocurrency trading services using pounds and euros.
It said in a statement that Binance Markets was not yet using its regulatory permissions and that the FCA’s decision would not impact the services offered on its Binance.com website.
“We take a collaborative approach in working with regulators and we take our compliance obligations very seriously,” a spokesperson said.
“We are actively keeping abreast of changing policies, rules and laws in this new space.”
While the trading of cryptocurrencies is not directly regulated in Britain, offering some services — like trading in cryptocurrency derivatives — does require authorisation.
Binance was told by the FCA that by June 30 it must display a notice stating “BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK” on its website and social media channels.
Binance must also secure and preserve all records relating to UK users and inform the FCA that those measures had been taken by July 2, although the regulator offered no detailed explanation for its demands.
British citizens will still be able to access Binance’s services in other jurisdictions.
The decision by the FCA is part of a wider effort to step up its oversight of cryptocurrency trading, which has soared in popularity in the UK and around the world.
Since January, the FCA has required all firms offering crypto-related services to register and show their compliance with anti-money laundering rules. However, it revealed earlier this month that only five companies had registered and the majority of businesses were not yet compliant.
But it’s not just the UK. Japan’s Financial Services Agency said in a notice on June 25 that Binance was operating in the country illegally while Germany’s BaFin said in April that the exchange risked being fined for offering digital tokens without an investor prospectus.
Bloomberg also reported last month that officials from the US Justice Department and Internal Revenue Service — tasked with probing money laundering and tax offences — had sought information from individuals with insight into Binance’s business.