Binance, the world’s biggest crypto-currency exchange, has been banned by the UK’s financial regulator.
The Financial Conduct Authority (FCA) has ruled that the firm, the world’s biggest crypto-currency exchange cannot conduct any “regulated activity” in the UK.
It also issued a consumer warning about Binance.com, advising people to be wary of adverts promising high returns on cryptoasset investments.
This comes amid pushback from regulators around the world against crypto-currency platforms.
Binance.com is an online centralised exchange that offers users a range of financial products and services, including purchasing and trading a wide range of digital currencies, as well as digital wallets, futures, securities, savings accounts and even lending.
Binance Group is currently based in the Cayman Islands, while Binance Markets Limited is an affiliate firm based in London. The firm has multiple entities dotted around the world and Binance Group was previously based in Malta.
The FCA said that Binance Markets Limited (BML), which is owned by Binance Group, is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. It has until Wednesday to comply with the ruling.
The regulator also stressed that no entity in the Binance Group holds any form of authorisation, registration or licence to conduct regulated activity in the UK.
While the FCA does not regulate crypto-currencies, it does regulate cryptoassets. Firms must be authorised by the regulator in order to advertise or sell such products in the UK.
This means that people in the UK are not allowed to use Binance’s services to speculate, or bet, on whether the price of a crypto-currency like Bitcoin goes up or down.
However, they are still allowed to use the website to purchase and sell crypto-currencies, which is not regulated, crypto-currency analyst Colin Stone told the World Business Report programme on BBC World Service.
But Binance told the BBC that the FCA notice has no “direct impact” on the services it provides from its website Binance.com.
“BML is a separate legal entity and does not offer any products or services via the Binance.com website,” said a Binance spokesman.
“The Binance Group acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions.”
He added that the firm’s relationship with its users had not changed, stressing: “We take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules and laws in this new space.”
