UK’s financial regulator bars Binance Markets from regulated business as global crypto crackdown spreads

Binance Markets was banned by the UK’s financial watchdog from doing any regulated business in the country, one of the most significant moves to date by a regulator amid a global crackdown in the cryptocurrency industry.

Binance Markets has until the evening of June 30 to confirm that it has removed all advertising and financial promotions, according to the Financial Conduct Authority’s register. The exchange must also make clear on its website, social media channels and all other communications that it is no longer permitted to operate in the UK. Binance Markets won’t be able to resume UK operations without prior written consent.

While the target of the restrictions is a separate legal entity from Binance – the world’s biggest cryptocurrency 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.

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 UK 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 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 train for some time.

Bitcoin gained on Monday, trading 5.1 per cent higher at US$35,309 as of 7:19am in Hong Kong. Cryptocurrency 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 to enter the space.

Binance announced the acquisition of an FCA-regulated entity last June along with plans for the launch of Binance.UK.

“A significantly high number of cryptoasset businesses are not 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 per cent have withdrawn applications following the FCA’s intervention.

The Financial Times reported on the UK notice earlier. Binance is being probed by several agencies in the US, Bloomberg News reported in recent months. And Japan’s Financial Services Agency issued a warning against Binance recently, saying it offered crypto services without registration.

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