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Regulator has restricted firm from business in the country
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Binance Markets Ltd. is a separate legal entity
Binance Markets Ltd., an affiliate of top global crypto bourse Binance, was told by the Financial Conduct Authority it has until the evening of June 30 to confirm it has removed all advertising and financial promotions, according to the authority’s register.
The exchange must also make clear on its website, social media channels and all other communications that it’s no longer permitted to operate in the U.K. Binance Markets won’t be able to resume U.K. operations without prior written consent.
While the target of the restrictions is a separate legal entity from Binance — 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.
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 progress for some time.
“These events prove that while blockchain may be decentralized and borderless, the technologies built to support open and public blockchains are not,” said Nick Saponaro, co-founder of the Divi Project in San Diego. “This feels like a long-time coming. The area that some crypto companies operate in is grey at best.”
Binance Markets “does not offer any products or services via the Binance.com website,” the global crypto exchange said Sunday on Twitter. “The Binance Group acquired BML May 2020 and has not yet launched its U.K. business or used its FCA regulatory permissions.”
A Binance spokesman said via email that the FCA’s notice restricts, but doesn’t remove, permissions owned by Binance Markets.
The move had little effect on trading in cryptocurrencies. Bitcoin gained on Monday, trading 6.8% higher at $34,854 as of 8:28 a.m. in London. Binance Coin, a token that has the fourth-biggest market value among cryptocurrencies and can be used to trade crypto and pay fees on Binance, is up 2.8% in the past 24 hours, according to pricing from CoinGecko.
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.
“Is this event a net-negative for the space? No. I think it shows maturity,” Saponaro said.
The FCA instructed Binance Markets to remove, or give instructions for the removal of, any advertising and financial promotions it currently has live. It also told the firm to secure and preserve all records relating to U.K. consumers, so they “can be provided to the FCA, or to a person named by the FCA, promptly on its request,” according to the statement.
A “significantly high” number of cryptoasset businesses aren’t meeting the required standards under the money laundering regulations, which has resulted in an unprecedented number of businesses withdrawing their applications, an FCA spokesperson said.
Of the firms assessed, more than 90% have withdrawn applications following the FCA’s intervention.
