The Financial Conduct Authority (FCA) banned Binance and affirmed that the firm cannot conduct any “regulated activity” in the country.
What is Binance?
“Binance Coin is the crypto-coin issued by Binance exchange and trades with the BNB symbol“. It is a firm part of a wider Group (Binance Group) which offers UK customers a range of products and services via Binance.com.
It was founded in China but moved to Japan in late 2017 due to the Chinese government’s strict ban on cryptocurrency trading. Moreover, since it moved its headquarters many times, the Group retains the benefits of cryptocurrency while avoiding some regulatory action that affects other exchange platforms.
To be clear, the FCA does not regulate cryptocurrencies such as Bitcoin, Tether, and Ethereum and for that reason, the trading of these digital assets would not be affected by the measure. However, The FCA requires exchanges to register with them, therefore, without the prior written consent of the FCA, Binance is not allowed to operate in the UK.
What does it imply?
A firm must be authorized by the FCA to advertise or sell specific products in the UK. Indeed, on their website, there is a warning list containing all those firms which must be avoided.
If a firm is not authorized by the FCA but advertises and sells investments in cryptoassets and you invest in them, you will not have access to Financial Ombudsman Service or the Financial Services Compensation Scheme (protects a consumer when financial firms fail).
On Saturdays, the FCA announced that Binance Markets Limited would have had three days to cease all regulated activities within The UK. And that no other companies linked to the Group have the requirements to operate in the country. Moreover, The FCA solicited The Group to remove any advertising or financial promotion by June 30.