The largest cryptocurrency exchange in the world was warned that it cannot provide services in the British jurisdiction without a license. Experts Explain How Restrictions Will Affect Binance Activities And Digital Asset Quotes
The British financial regulator (FCA) has warned the world’s largest cryptocurrency exchange Binance that it can no longer operate in the country.
The regulator claims that the service provider of Binance.com is Binance Markets Limited, part of the Binance Group, which is not licensed to operate in the UK.
The FCA also warned of the dangers of investing in crypto assets. The department notes that most of the companies offering such services are not licensed in the UK, so investors will not be able to contact the financial ombudsman and claim compensation for losses.
Representatives of the crypto exchange referred to the official announcement of the site, which states that the FCA warning does not affect the services provided by the Binance.com website.
The site representatives noted that Binance Markets Limited is a separate legal entity and does not offer services through the Binance.com website.
We are aware of recent reports about an FCA UK notice in relation to Binance Markets Limited (BML).
BML is a separate legal entity and does not offer any products or services via the https://t.co/QILSkzx7ac website. (1/4)
— Binance (@binance) June 27, 2021
In the next few weeks, the Binance crypto exchange may warn British users that their accounts will be closed, said Ivan Petukhovsky, co-founder of the UK-registered EXMO crypto exchange.
In his opinion, the UK does not belong to jurisdictions that are friendly to cryptocurrencies, and there is a clear regulation of financial activities in the country, which implies registration with the FCA.
“Regulation is an undeniable factor in market growth. As more and more institutional investors become willing to invest in cryptography, the risks are decreasing, ”Petukhovsky said.
The “Wild West” phase for the crypto sector is almost over, and exchanges that comply with AML (Anti-Money Laundering) and KYC (Customer Identity) rules are finally getting some advantages in this highly competitive market, the expert believes.
The decision of the UK may be related to the events of the first half of 2021, when cryptocurrencies showed the highest volatility in history – strong growth at the beginning of the year, then a sharp decline, explained the head of the analytical department of AMarkets Artem Deev.
According to him, while the actions of the regulator only restrict the activities of the largest crypto exchange, which operated without a license in the country, but Binance can restore its activities in the UK if it opens its own licensed division in the country. The analyst also predicted that the British regulator’s ban on Binance would not seriously affect the quotes.
In May, it became known that the Department of Justice and the Internal Revenue Service of the United States initiated an investigation against the crypto exchange Binance.
State authorities conduct inspections for violations in the field of combating money laundering and tax laws. So far, no charges have been brought against the site.
In March 2021, Binance became a defendant in an investigation by the United States Futures Trading Commission (CFTC).
The regulator studied the work of the company for the admission of American residents to trade in crypto derivatives in the absence of an appropriate license.
