The City watchdog has effectively blacklisted the world’s largest cryptocurrency exchange by finding it ‘unsuitable’ for regulatory oversight.
The Financial Conduct Authority (FCA) claimed in a letter to Binance’s UK branch that the company constituted a “serious risk to consumers.” It went on to say that the company was unwilling to work with it.
However, because Binance.com is not linked to a UK firm, the regulator is powerless to prevent Britons from using it. The criticism comes at a time when the popularity of cryptocurrencies like bitcoin is skyrocketing.
Consumers who wish to acquire bitcoin will frequently utilise an exchange such as Binance, which connects buyers and sellers.
Every day, £1.5 billion worth of cryptocurrencies are exchanged on Binance, according to the company’s website.
Customers who want to buy bitcoin usually go to an exchange like Binance, which connects buyers and sellers.
According to the company’s website, £1.5 billion worth of cryptocurrencies are traded on Binance every day.
The FCA, overseen by Nikhil Rathi, is said to be concerned about Binance’s anti-money laundering and anti-fraud measures.
In June, it delivered a severe rebuke to Binance, ordering it to post warnings on its website informing customers that the company “is not authorised to engage in any regulated business in the United Kingdom.” The FCA, on the other hand, has few options for preventing customers from purchasing Binance products.
Binance Markets Limited, the group’s UK arm,’refused’ to respond to basic questions, including money laundering inquiries, according to the regulator.
‘The FCA considers that the firm’s responses have been insufficient and have included blatant refusals to give information,’ the FCA wrote in its letter to Binance Markets.
Failures to provide facts about how the group is organised, clarify what pathways UK consumers could use to buy its products, and identify the legal entity behind it were among the FCA’s findings.
Changpeng Zhao launched the firm in China in 2017 and it is based in the Cayman Islands. When it bought British firm EddieUK and renamed it Binance Markets, it was developing a UK site. Binance Markets, however, withdrew the application this year due to new FCA requirements.
By March 2022, all bitcoin businesses in the UK must register with the FCA, but the regulator claims that many of the applications it has received are woefully inadequate.
The Governor of the Bank of England, Andrew Bailey, has warned investors that they should expect to ‘lose everything.’
‘As observed by the FCA, Binance Markets has completely complied with all areas of its criteria,’ according to Binance. We are continuing to work with the FCA to resolve any issues that have arisen.
We are committed to working with regulators and policymakers to promote policies that protect consumers, foster innovation, and propel our business ahead as the bitcoin ecosystem continues to grow and evolve.