The UK bans crypto-currency like Binance, the world’s largest cryptocurrency exchange and the Financial Conduct Authority (FCA) has decided that the company cannot engage in any “regulated activity” in the United Kingdom.
The Financial Conduct Authority, a regulatory body in the UK, bans Binance, a popular cryptocurrency exchange platform, from offering certain services in the country. https://t.co/udOK4edIeP
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Consumer alert about Binance
It also issued a consumer alert about Binance, telling users to be aware of advertisements promising large returns on crypto-asset purchases.
The FCA notification, according to Binance, will have no “direct impact” on the services it offers through its website Binance.com. Because Binance’s current crypto exchange is not domiciled in the United Kingdom, the FCA judgement will have no effect on UK people who use the website to buy and sell cryptocurrencies.
The FCA does not regulate cryptocurrencies, but it does require cryptocurrency exchanges to register. Binance is not permitted to operate an exchange in the United Kingdom since it has not registered with the Financial Conduct Authority (FCA).
The FCA’s move comes in the wake of regulatory backlash against bitcoin exchanges around the world.
What is Binance and what does it do?
Binance is a centralized online exchange that allows users to buy and sell a variety of digital currencies, as well as digital wallets, futures, equities, savings accounts, and even lending. Binance Group is headquartered in the Cayman Islands, with Binance Markets Limited in London as an associate. Binance Group was previously situated in Malta and has several businesses all over the world.
Binance Markets Limited (BML), which is controlled by Binance Group, is now not permitted to engage in any regulated activity without the FCA’s prior written authorization, according to the regulator. The deadline to comply with the order is Wednesday.
The regulator also stated that none of the Binance Group’s entities is authorized, registered, or licensed to perform regulated activities in the United Kingdom.
The effect of the UK bans cryptocurrency on the purchase of Binance
The Financial Conduct Authority’s decision to prohibit Binance from operating in the United Kingdom appears to have minimal impact at first glance. After all, it won’t prohibit the company’s many UK customers from buying and selling Bitcoin and other cryptocurrencies through its Cayman Islands-based exchange.
Nonetheless, the FCA is sending a strong message that it is concerned about the risks of cryptocurrency investing in general. It wants them all to register because it’s worried about them being used as a cover for illegal activity, and it wants consumers to be extremely cautious.
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In addition to prohibiting Binance from opening an exchange in the UK, the regulator has ordered its UK division to cease all advertising by June 30. More importantly, it has until the end of this week to prove to the FCA that it has all of its UK clients’ records preserved and ready to be turned over if necessary.
Consumers in the United Kingdom should check whether any cryptocurrency company is registered with the authority and, if it isn’t, consider withdrawing their funds.
The FCA may not be able to prevent anyone from trading cryptocurrencies, but it has raised its biggest red flag and is waving it vehemently.