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UK Cracks Down on Binance: What Does This Mean?

cryptocurrency regulation
tarik_vision on Deposit Photos

Cryptocurrency has been all everyone is talking about these days. And there are many speculations about where it’s headed next. Some people think it will replace fiat currency like in El Salvador — which is the first country to fully adopt crypto as a competing currency of the country. But China and India are trying to get rid of crypto fully. With many other countries following, some people are worried about the future of crypto. Now, Binance Market Limited (BML), which is associated with one of the largest crypto exchanges, was banned by the UK’s regulatory Branch, the Financial Conduct Authority (FCA). Is this the beginning of crypto regulation?

Why is the FCA doing this? 

The FCA requires all exchanges based in the UK to register with them if they want to continue business in the UK. But BML has not registered with them, so the FCA issued a statement saying they’re “not currently permitted to undertake any regulated activities without the prior written consent of the FCA.”

The FCA doesn’t regulate cryptocurrency, but they do regulate other “crypto asset derivatives,” such as future contracts, options and more, which BML offers. So, exchanges must have permission from the FCA to advertise these forms of investing. 

The FCA isn’t the only regulator cracking down on Binance. Japan’s regulator branch, the Financial Service Agency (FSA), recently issued a warning to Binance for operating in the country without permission. 

How does this affect UK investors? 

Surprisingly, this occurrence doesn’t affect UK citizens much at all. In a series of tweets from Binance, they explained BML seems to be separate from their current exchange Binance.com. 

So, UK citizens can still exchange crypto through the site Binance.com because this site and BML are separate entities. Binance.com is based in the Cayman Islands, while BML is an affiliate firm based in the UK. Since BML was based in the UK, the FCA wanted them to register to do regulated activities, which BML has not done.    

The UK isn’t banning crypto.

For the worried people out there, the UK isn’t banning Binance because of crypto. Instead, they are cracking down on BML for not complying with regulatory rules. However, the UK/FCA is sending a strong message concerning people investing in the unchartered territory of cryptocurrency.

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