One of the largest cryptocurrency exchanges, Binance got banned from operating in the UK by the Financial Conduct Authority (FCA). The warning came on Saturday that Binance is not permitted to carry out regulated activities in the country, just after Japan dispensed a similar warning the previous day.
Stating their prerequisite, the FCA emphasized that the exchange would need preliminary written permission to carry out any regulated activity.
The FCA also stated that Binance does not “hold any form of U.K. authorization, registration or license to conduct a regulated activity in the U.K.” They also noted that Binance was still offering services to the UK via their website.
In response, Binance tweeted that the warning does not interfere with the activities on their website Binance.com, stating that their relationship with their users in the UK stays the same.
Consequently, starting from June 30th, Binance will be mandated to put up a clear notice in their website and their apps that will essentially intimate UK users of the situation. The text reads that:
Binance markets limited is not permitted to undertake any regulated activity in the U.K. Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. (No other entity in the Binance Group holds any form of U.K. authorization, registration, or license to conduct a regulated activity in the U.K.).
It’s worthy of note that Binance previously withdrew its application to the FCA because it did not meet its anti-money laundering requirements.
This FCA notice raises a question, what is the implication for UK residents and their crypto assets? The FCA’s restriction on Binance in the UK does not stop Brits from accessing Binance’s products and services in the United Kingdom.
Binance stated that it’ll need “a collaborative approach in working with regulators and we take our compliance obligations very seriously”. They also said that “The FCA notice has no direct impact on the services provided on Binance.com. Our relationship with our users has not changed. We are actively keeping abreast of changing policies, rules, and laws in this new space.”
Reacting to the FCA’s restriction on Binance, Laith Khalaf, financial analyst at AJ Bell, said that “This isn’t a step change in regulation which is going to knock the crypto craze on the head, but it is part of a growing trend of regulatory intervention in crypto markets,” He asserted that “The idea that policymakers are simply going to allow a decentralized shadow payments system to emerge without any regulate crypto assets is fantastical, and if the use of crypto assets becomes more widespread, we can expect beefed-up regulation to follow suit.”