Why the UK banned the world's largest cryptocurrency exchange, Binance?

Alan Joseph Alan Joseph
Jun 29, 2021 4 min read
Why the UK banned the world's largest cryptocurrency exchange, Binance?

The cryptocurrency exchanges have been growing for a very long time with a huge set of believers towards the digital coins. At the same time, there has been a lot of crashes, a lot of wealth wiped off, and as well as a lot of wealth gained through it.

However, many countries across the globe have been laying restrictions over the trading of cryptocurrencies and the most recently even the UK has banned the largest cryptocurrency of the world from undertaking transactions related to cryptocurrency. In this article let’s look at the reason for it.

Binance – Latest News
Terms stated by FCA to Binance
Reason Why UK imposed a ban on Cryptocurrency exchange - Binance
Will UK ban other cryptocurrency exchanges?
FAQ

Binance – Latest News

The Financial Regulator of Britain has ordered Binance which is one of the largest cryptocurrency exchanges around the globe, to stop all the regulated activities conducted by the crypto exchange. The Financial Regulator has also issued a warning for the consumers about the platform which is coming under critical observation globally.

In a notice that was sent on 25 June 2021, the Financial Conduct Authority of the UK has conveyed to the UK entity of Binance, Binance Market Limited that the exchange should not carry out any regulated activities without the prior written consent from the FCA.

Terms stated by FCA to Binance

The trading of cryptocurrencies is not directly restricted in the United Kingdom but offering services such as trading in the derivatives of cryptocurrencies does require the authorization.

The FCA has asked Binance to display a notice on its website and social media channels by 30 June 2021 stating that β€œBINANCE MARKET LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK”.

Other than this the FCA has asked Binance to secure and preserve all the records relating to the UK consumers and to provide the information to the FCA by 2 July 2021.


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Reason Why UK imposed a ban on Cryptocurrency exchange - Binance

The regulator has not provided any information or has provided an explanation for why it had taken the measure against Binance. However, Binance had stated earlier that it takes its legal obligations very seriously and engages with the law enforcement and regulators in a collaborative manner.

Some of the reasons can be the problems faced by Binance across the globe. The regulator of Japan has conveyed on 25 June 2021 that Binance had been operating in the country illegally. This was found through a notice that was posted on the country’s Financial Services Agency Website.

In the month of May officials from the US Justice Department and Internal Revenue Service who investigate tax offenses and money laundering had sought various information from individuals regarding insights into the business of Binance.

In the month of April, the financial regulator of Germany, BaFin had warned the exchange about the risks of being fined for offering Digital tokens without a prospectus of the investor.

These can be the reasons why the UK had decided to ban the cryptocurrency exchange in the country. Amidst the growing number of acquisitions and cases against the Crypto exchange, the UK regulator would have taken the move.

Will UK ban other cryptocurrency exchanges?

Since the month of January 2021, the FCA has asked all the different Cryptocurrency exchanges and the apps that offer crypto related services to register and to provide details that they comply with the rules of anti money laundering. However, in the month of June, the FCA has conveyed that only 5 firms have registered and that the majority of the firms were not compliant.

The FCA is stepping up its unintentional failure to notice the cryptocurrency trading, which has grown in popularity in the UK along with various other countries across the globe.


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Conclusion

This may be a major step towards hunting down the firms that are not compliant with the anti money laundering rules in the country. Binance may be the first step that is taken by the regulator. However, the countries across the globe have been hunting down the crypto exchanges and various transactions of the cryptocurrencies.

FAQ

Is Binance banned in UK?

Yes, The UK financial watchdog has banned leading cryptocurrency exchange Binance from all regulated activities.

Why is Binance being banned?

Binance has not registered with the FCA and therefore is not allowed to operate an exchange in the UK.

Will UK ban Crypto exchanges?

The U.K. does not regulate cryptocurrencies, but it requires exchanges to be registered to operate, which means companies must comply with anti-money laundering measures.

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