Binance, the world’s largest cryptocurrency exchange, has been warned by UK financial authorities.
The Financial Conduct Authority (FCA) has ruled that a company cannot conduct a “regulated business” in the UK.
He also advised people to beware of advertisements that promise high returns on cryptocurrency investments.
The FCA’s stand
Binance has stated that the FCA notice will not “directly affect” the services provided by the Binance.com website. Existing cryptocurrency exchange Binance is not based in the UK, so despite the FCA ruling, it will not affect UK residents using their website to buy and sell cryptocurrencies. The
The FCA does not regulate cryptocurrencies but requires registration on an exchange. Binance does not have registration with the FCA and therefore does not have the right to operate a UK exchange.
The FCA’s move came amid resistance from regulators around the world against cryptocurrency platforms.
Binance.com is a centralized online exchange that offers its users a wide range of financial products and services. These include the purchase and trading of various digital currencies, from digital wallets, futures, securities, savings accounts, to loans.
Binance Group is currently based in the Cayman Islands, and Binance Markets Limited is a London-based subsidiary. The company has several divisions spread around the world, and Binance Group was previously based in Malta.
The FCA has stated that Binance Markets Limited (BML), owned by Binance Group, is currently not authorized to engage in regulated activities without the prior written consent of the FCA. He has to implement his decision by Wednesday.
The regulator also emphasized that no Binance Group entity is licensed, registered, or licensed to conduct regulated activities in the UK.
Controversies over Binance’s activities
This isn’t the first time Binance has been under regulatory scrutiny for its global operations. According to Bloomberg, a division of Binance Holdings in the United States has come under investigation by the U.S. Securities and Exchange Commission (SEC), particularly officials involved in money laundering and tax violations.
In April, the SEC issued a similar warning to US consumers regarding the platform.
On Saturday, Binance announced its withdrawal from Ontario, Canada. This is after accusing the Ontario Securities Commission (OSC) and several other crypto trading platforms of not complying with the rules of Ontario, Canada.
On Friday, the Financial Services Agency (FSA) issued a second warning in three years that Binance was operating in Japan without a license.
The FCA is taking a blunt approach
Mark Walker is a tech entrepreneur who has invested in cryptocurrencies for three and a half years with a farm run. He has been using Binance for about 6 months.
He explains that this ruling probably won’t impact me in the short term. But in the long term, it may push me to use one of the many other less secure exchanges. The FCA is taking a harsh stance; this is a growing industry that employs millions, so it’s similar to banning the internet in the 1990s.
Mr. Walker also added that he called the FCA this morning and they couldn’t even answer whether existing users’ funds are available for withdrawal.
One of the services Binance offers is the ability to use local currency to buy digital currencies known in the industry as fiat. According to CoinDesk, Binance’s US partner, Silvergate Bank, has decided to stop processing the company’s USD deposits and withdrawals in mid-June. The cryptocurrency exchange says not all organizations have affiliations with it, but longtime cryptocurrency investor and entrepreneur Nick Saponaro told the BBC that this is a convenient tactic to avoid regulatory issues.
Binance tries to comply
According to him, Binance has moved to new jurisdictions several times in the course of its operations. It’s not uncommon for these young crypto ventures to move. If the rules don’t match the requirements, work will move.
Another division of Binance. The US is currently one of the largest digital currency exchanges in the world. Binance is one of the largest in the world. According to him, the fintech industry is
He believes they are trying to comply with regulations, but often with these businesses, it’s an ‘ask for forgiveness’ model, [where] they hope they can make enough money so if they do incur a fine, it’s negligible compared to what they’ve earned.
Mr. Saponaro, the co-founder of the Divi cryptocurrency and Divi Project blockchain payment ecosystem, said the real problem with cryptocurrency exchanges is that they are still centralized. As there is still a central authority that takes over the management of users’ money. It’s almost as if you’re in a bank.
This goes against the purpose for which cryptocurrencies and blockchain technology develop and believes that all exchanges should be in full decentralization so that users have full control over their digital coins.
The Optimism Amidst the Scrutiny
But he stresses that digital currency is not a scam and that the fintech industry will eventually get it.
They are 12 years into the crypto adoption cycle. He said that these things just take time-the exact same things said about the internet initially.
Governments of each jurisdiction, especially the G7, need to give us the full transparency and confidence to give us the full regulations about what we can and cannot do. It needs to fit what the technology actually does.
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