Binance Responds to UK Exchange Service Restrictions

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In Brief
  • Binance responds to the U.K. financial regulator's warning.

  • The exchange clarified that BML is a separate legal entity from Binance.com.

  • Binance goes on to say that it has not yet launched its U.K. business.

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Binance offered a series of tweets responding to the U.K. FCA after the latter sent a notice to the exchange saying that it was not permitted to carry out regulated operations in the country.

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In a series of tweets published on June 28, Binance responded to a recent statement from the United Kingdom’s Financial Conduct Authority (FCA). The regulator, earlier this week, asserted that Binance Markets Limited was not permitted to conduct regulatory operations in the U.K., as the exchange lacked the license to carry out business.

Specifically, the FCA warned consumers of Binance Markets (BML), with the remarks also pertaining to the larger Binance Group. The notice came with a statement saying that BML was not allowed to conduct regulated trading activity without written consent from the FCA.

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Binance clarified that BML was a separate entity from Binance.com and does not offer associated products or services. It goes on to say that it has not yet launched its U.K. business or used the aforementioned regulatory permissions. The exchange also clarifies that it has no direct impact on the services provided on Binance.com.

Binance to ensure compliance

Binance also offers a conciliatory note in saying that it takes a “collaborative approach” to working with regulators and that it takes regulations seriously. The exchange is now facing scrutiny from regulators in several countries as authorities begin examining how to rein in the cryptocurrency market.

In particular, popular exchanges like Binance are being targeted because it has a large user base and a presence in several countries. Binance is one of the largest exchanges in the world by trading volumes, and governments have grown concerned over the impact the market could have on retail investors.

The FCA announced a temporary registration regime against cryptocurrency firms until July 2021 in December 2020. Canada and Japan, meanwhile, have also sent notices to the exchange

A global movement targeting exchanges

The U.K. is one of many countries that are cracking down on exchange operations, with the concerns largely related to investor protection, market manipulation, and money laundering. The move is aligned with other global organizations that are trying to curb the hitherto unrestricted growth of the cryptocurrency market.

The Financial Action Task Force (FATF), which deals with curbing money laundering and the use of funds for illicit activity on a global level, recently chided Maltese officials for lax oversight in their cryptocurrency regulation. The Ontario Securities Commission, which has also stepped up its regulation game, has summoned Poloniex and KuCoin for failing to comply with regulation. Binance has left the Ontario province as a result of this crackdown.

These global developments are a signal that governments believe that it is time to issue some action on the crypto market — which may not be draconian, but will certainly curb it. The U.S., meanwhile, is also focusing on regulating the market, but no large-scale action has taken place yet. The Biden administration is reportedly working on a broad crypto regulation framework, and remarks and actions taken by individuals and organizations hint that this may be coming soon.

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Rahul's cryptocurrency journey first began in 2014. With a postgraduate degree in finance, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has guided a number of startups to navigate the complex digital marketing and media outreach landscapes. His work has even influenced distinguished cryptocurrency exchanges and DeFi platforms worth millions of dollars.

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