British regulators banned Binance. What are the prospects for cryptocurrency exchanges?
Binance has always been the world’s largest cryptocurrency exchange. However, despite not minding its reputation, the UK Financial Conduct Authority (FCA) Prohibit It operates from in the country.
According to the regulator, from June 30, 2021, Binance will no longer be allowed to conduct regulated activities in the country.
“Binance MARKETS LIMITED does not allow any regulated activities in the UK”
British residents who wish to use the cryptocurrency trading platform to engage in derivatives transactions may no longer visit it. In an interview with CNBC, a Binance spokesperson stated:
“FCA UK’s notice has no direct impact on the services provided on Binance.com… Our relationship with users has not changed. We take a collaborative approach when working with regulators, and we take our compliance obligations very seriously,” the spokesperson added Tao. “We are actively keeping up with the ever-changing policies, rules and laws in this new field.”
However, since such activities are not regulated, crypto trading may still exist. However, financial regulators have warned Britons against unregulated participants and encouraged them to withdraw assets from these companies.
In addition to the recent British operations, Financial regulator The United States, Japan, and Canada have also been investigating exchanges for non-compliance with regulatory requirements. The US Securities and Exchange Commission took the same action against Binance in April 2021.
The background of the Binance ban
The Financial Conduct Authority requires every company that provides financial services in the UK to be registered with them. Cryptocurrency exchanges do not meet this requirement and therefore cannot operate in the country.
Binance and many other cryptocurrency exchanges submitted applications to the FCA to launch digital assets in the UK market. However, many exchanges, including Binance, withdrew these applications. The reason is that they cannot meet the FCA’s anti-money laundering requirements.
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Binance explicitly withdrew its application on May 17, 2021. However, according to an FCA spokesperson, Binance has been under the attention of regulators for some time.
Therefore, the decision to ban them from conducting regulated activities in the UK market was not spontaneous. They also stated that the ban does not cover all Binance activities in the market.
Cryptocurrency exchanges may still provide cryptocurrency trading services to British residents through their official exchanges not in London.
In any case, financial regulators prohibit cryptocurrency exchanges from establishing cryptocurrency exchanges in the UK. In addition, they also instructed the UK branch to close all advertisements in the country by June 30, 2021.
What does the ban mean for the encryption industry?
Judging from the recent actions taken by financial regulators against Binance, the crypto industry must be prepared to engage in more regulatory battles with the authorities. Prior to the British ban, the US Securities and Exchange Commission had been investigating allegations of exchange taxation and money laundering.
Binance even revealed that it is halting activities in Ontario, Canada. The Ontario Securities Commission accused Binance and other cryptocurrency exchanges of failing to comply with the regulations for operating in the country.
In addition, the cryptocurrency exchange received another warning from the Financial Services Agency of Japan due to unauthorized operations in the country. All these pressures from regulators are shaking the foundation represented by cryptocurrency and blockchain technology.
The cryptocurrency industry aims to facilitate transactions without interference from third parties or intermediaries. Now, forcing operators to operate in accordance with financial regulations is becoming a concern for crypto enthusiasts.
Despite the ban, Binance coin (BNB) has shown resilience and seems to be recovering from the terrible situation of last week.
Featured image from Pixabay, Charts from TradingView.com