Binance must obtain a license from the British regulator to continue to operate in the United Kingdom, as well as in Japan. However, the trading activity continues.
Financial regulators are at work. This is particularly true of the Financial Conduct Authority, the FCA, in the United Kingdom. It has just called to order Binance, one of the giants of crypto exchanges.
The authority prohibits the firm to operate on its market. Paradoxically, however, British traders can continue to use the services of the exchange. A situation difficult to understand? Indeed.
Some clarifications are necessary. The FCA’s ban concerns Binance Markets Limited, the firm’s British branch. Binance Group’s international services, however, are not affected by the decision.
Therefore, clients residing in the UK can continue to use the platform. The local version Binance.UK, which is intended to allow British people to open virtual bank accounts, is however banned by the FCA.
In order to operate, companies must first obtain the approval of the supervisory authority. Binance does not have such a license for its subsidiary Binance Markets Limited. Moreover, the exchange withdrew its application for accreditation last May.
Does Binance, which does not have a head office, escape any regulation? A priori, for the moment. The FCA explains to Decrypt that it is looking “closely” at the way the group interacts with British consumers.
In addition, the regulator believes it is the exchange’s responsibility to “ensure that it understands all applicable regulatory requirements in the jurisdictions in which it operates. “As for Binance Markets Limited, the reasons for its disagreement with the FCA are not specified.
But the exchange is not the only one to have thrown in the towel. Indeed, 90% of crypto players applying for registration by the regulator have since given up. According to the FCA, these companies did not meet its anti-money laundering requirements.
These decisions by the authorities are not a deal breaker for exchanges nonetheless. In Malaysia, the activity of Binance is considered illegal since last summer. Operations continue however.
The recent warning of the Japanese regulator could therefore also remain a dead letter. Since 2017, the FSA has been subjecting crypto companies to filing a registration application. Binance did not respond to this request.
As a result, the Financial Services Agency of Japan (FSA) issued a warning to the exchange. The regulator criticizes him for operating in the country without having first registered with its services.