The U.K.’s financial regulator has banned Binance, one of the world’s largest cryptocurrency exchanges, from regulatory trading and warned users against the platform, which is coming under the scrutiny of authorities worldwide.
In a notice dated Saturday, the Financial Conduct Authority (FCA) said Binance’s U.K. branch Binance Markets Ltd “may no longer carry on any regulated activity without the prior written consent of the FCA, with immediate effect.” Binance did not respond to a request for comment on Sunday.
Trading in cryptocurrencies such as bitcoin is not regulated in the U.K., but services such as trading derivatives on those assets fall under financial regulation. Crypto investments “that we would count as securities” are also now banned. This could include digital tokens, for example.
What impact this will have on the market in general is not yet foreseeable, but it remains exciting and we currently recommend against medium-term investments. In the long term, cryptocurrencies can hardly be stopped but we definitely expect strong fluctuations on the markets and exchanges in the coming weeks.
The regulator did not explain why it was taking these measures against Binance. The company had previously stressed that it takes its legal obligations “very seriously” and is “collaborative with regulators and enforcement agencies.”
The FCA is tightening its oversight of cryptocurrency trading, which has increased dramatically this year in the UK as well as globally. In May alone, Binance recorded $1.5 trillion worth of trading volume.
Since January, the FCA has required all firms offering crypto services to register and prove compliance with anti-money laundering guidelines. However, in early June, the agency said only five firms had registered so far, with the majority failing to comply. The Financial Times reported on Sunday, citing insiders, that Binance had applied for registration but withdrew the application after dialogue with the FCA.
Binance was founded in China in 2017 by Canadian crypto billionaire Changpeng Zhao and rose to become the platform with the largest trading volume within a few months. Since then, the company’s headquarters changed several times after authorities demanded more control.
John D. Rockefeller