Crypto exchange Binance ordered to stop regulated activities in Britain

Binance Markets has until the evening of June 30 to confirm that it has removed all advertising and financial promotions.
Binance Markets has until the evening of June 30 to confirm that it has removed all advertising and financial promotions.PHOTO: BT FILE

LONDON (BLOOMBERG) - Binance Markets was banned by Britain’s financial watchdog from doing any regulated business in the country, one of the most significant moves to date by a regulator amid a global crackdown in the crypto industry.

Binance Markets has until the evening of Wednesday (June 30) to confirm that it has removed all advertising and financial promotions, according to the Financial Conduct Authority’s (FCA) register. The exchange must also make clear on its website, social media channels and all other communications that it is no longer permitted to operate in Britain.

Binance Markets will not be able to resume operations in Britain without prior written consent.

While the target of the restrictions is a separate legal entity from Binance - which is the world’s biggest crypto exchange by reported turnover - the FCA edict specifies that the notice must be put on Binance.com and communication channels including the Binance mobile and desktop applications.

Binance Markets “does not offer any products or services via the Binance.com website”, the global crypto exchange said on Sunday on Twitter. “The Binance Group acquired BML (Binance Markets Limited) in May 2020 and has not yet launched its UK business or used its FCA regulatory permissions.”

A Binance spokesman said via e-mail that the FCA’s notice restricts, but does not remove, permissions owned by Binance Markets.

The move extends a regulatory crackdown on the cryptocurrency sector amid concerns about its potential involvement in money laundering and fraud. Binance withdrew an application related to the 5MLD - an anti-laundering directive - on May 17 following “intensive engagement from the FCA”, according to the watchdog, which said the action had been in train for some time.

Bitcoin gained on Monday, trading 5.1 per cent higher at US$35,309 as at 7.19am in Hong Kong. Crypto bulls often interpret tough regulatory action as a sign that the market is maturing, and say the potential for a more robust safety net may entice more investors to enter the space.

Binance announced the acquisition of an FCA-regulated entity last June along with plans for the launch of Binance.UK.

“A significantly high number of crypto-asset businesses are not meeting the required standards under the money laundering regulations, which has resulted in an unprecedented number of businesses withdrawing their applications,” said an FCA spokesman.

Of the firms assessed, more than 90 per cent have withdrawn applications following the FCA’s intervention.

The Financial Times reported on the British notice earlier.

Binance is being probed by several agencies in the United States, Bloomberg News reported in recent months. And Japan’s Financial Services Agency issued a warning against Binance recently, saying it offered crypto services without registration.