UK bans crypto exchange Binance as global regulatory scrutiny heats up

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New York Post 28 June, 2021 - 06:52am 35 views

Why is Binance banned in UK?

The Financial Conduct Authority (FCA) has ruled that the firm cannot conduct any "regulated activity" in the UK. ... Binance has not registered with the FCA and therefore is not allowed to operate an exchange in the UK. The FCA move comes amid pushback from regulators around the world against cryptocurrency platforms. BBC NewsBinance: Watchdog clamps down on cryptocurrency exchange

Why is Binance banned?

(Bloomberg) -- Binance Markets Ltd. was banned by the U.K.'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 crypto industry. Yahoo FinanceU.K. Financial Regulator Bars Crypto Exchange Binance Markets

By Will Feuer

June 28, 2021 | 7:52am | Updated June 28, 2021 | 9:03am

The United Kingdom’s financial regulator has banned the popular cryptocurrency exchange Binance from operating in the country — as governments around the world consider how to regulate the burgeoning sector.

The UK’s Financial Conduct Authority announced Saturday that Binance Markets Limited, the company’s UK affiliate, “is not permitted to undertake any regulated activity in the U.K.”

Despite news of the UK crackdown, Bitcoin was actually trading higher Monday morning. The digital currency was going for more than $35,000 early in the day before falling slightly back to $34,300. That represents a surge of more than 5 percent from a low of $32,500 on Sunday evening, according to Coindesk’s Bitcoin price index.

The regulatory move will still allow UK residents to access binance.com, the company said, but the FCA added that Binance, the world’s largest crypto exchange by trading volume, has until the close of business on Wednesday to remove all advertising and financial promotions it currently has up.

By the same date, the FCA said, the company must add a warning in a prominent place on its website and mobile app that reads:

“BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK. Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. (No other entity in the Binance Group holds any form of UK authorisation, registration or license to conduct regulated activity in the UK).”

In a statement on Twitter, Binance noted Sunday that the affiliate targeted by the UK restrictions is a “separate legal entity” from Binance.

Even though the FCA’s move bars Binance Markets Limited from offering regulated services in the country, non-registered firms like binance.com can still interact with residents in the UK, the FCA said.

The FCA’s move comes almost a month after the regulator issued a statement, saying that a “significantly high” number of crypto firms were failing to meet the country’s recently issued requirements on preventing money laundering.

Those guidelines prompted several crypto firms, including Binance Markets Limited, to withdraw their applications to officially register with the FCA.

It’s just the latest move by regulators around the world to crackdown on and try to reel in the crypto sector.

Japan’s Financial Services Agency issued a warning last that Binance was operating in the country without registration.

And in China, regulators have escalated their efforts to halt cryptocurrency mining and prevent banks and other financial firms from hosting crypto services.

In the US, too, Binance is under scrutiny. The Commodity Futures Trading Commission is looking into whether Binance allowed Americans to make trades that it’s not permitted to host, according to Bloomberg. The outlet also reported that the Justice Department and Internal Revenue Service, are investigating the exchange.

Binance hasn’t yet been accused of wrongdoing by any of the agencies and it remains unclear if the US will seek enforcement action.

Read full article at New York Post

Futile UK crypto curb flags regulatory blind spot

Reuters 28 June, 2021 - 12:21pm

LONDON, June 28 (Reuters Breakingviews) - Regulators have gotten their heads around crypto assets. The next challenge is getting their hands on the companies. Britain’s Financial Conduct Authority on Saturday said that Binance Markets, the local arm of the world’s largest crypto exchange, was “not permitted to undertake any regulated activity in the UK”. Shortly after, the company said on Twitter that the notice has “no direct impact on the services offered on Binance.com”.

How can that be? In general, the FCA can only regulate companies that are either based in Britain or that actively promote products there. A bitcoin trading platform registered elsewhere doesn’t necessarily count: according to Forbes Binance is based in the Cayman Islands. Founder Changpeng Zhao sought regulatory approval for Binance Markets, but its main services are unregulated and offered instead by the parent group. It’s not clear what he did to irk the FCA, or whether his customers will care. What’s obvious, though, is that the watchdog lacks powers to police a fast-growing part of the financial sector. (By Liam Proud)

On Twitter http://twitter.com/breakingviews

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Why the UK banned Binance and what it means for your crypto assets?

Yahoo Finance 28 June, 2021 - 08:41am

Over the weekend the Financial Conduct Authority (FCA) ordered Binance Markets to remove all advertising and financial promotions by 30 June.

The company is required to make clear on its website, social media platforms, and all other communications that it is no longer permitted to operate in the UK, and must not carry out any regulated activities in Britain without prior consent.

“Binance Markets Limited is not permitted to undertake any regulated activity in the UK,” the FCA said, adding, “no other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK”.

The Cayman Islands-registered firm exchange has until Wednesday evening to confirm it has complied with the watchdog’s demands.

Here are some reasons why the FCA has intervened:

The FCA’s move ensures that anyone wanting to provide cryptocurrency investment products in the UK, must do so in a secure and regulated environment, following in the footsteps of other major regulators in the US and in Asia.

Since the start of this year, crypto-related firms must register with the FCA before doing business in the UK, and comply with anti-money laundering regulations. However, most firms have been granted “temporary registration” until July.

Although this is one of the most basic building blocks of regulation for financial services firms, earlier this month the watchdog said that just five firms had registered, and that the majority were not yet compliant.

A spokesman for the FCA said: “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. The action taken on Binance Markets Limited has been in train for some time.”

Read more: Bitcoin rises as UK financial watchdog bans Binance cryptocurrency exchange

It comes just days after the Japanese financial regulator issued a consumer warning against Binance. It was the second time the country’s Financial Services Agency (FSA) warned about Binance after publishing an identical notice in 2018.

US and German regulators have also raised concerns over the firm’s activities in the past.

“Cryptocurrency is a victim of its own success because regulators across the globe are increasingly turning their beady eyes on cryptoassets, and companies like Binance that offer crypto services to consumers,” Laith Khalaf, financial analyst at AJ Bell, said.

He added: “This isn’t a step change in regulation which is going to knock the crypto craze on the head, but it is part of a growing trend of regulatory intervention in crypto markets.

“The idea that policy makers are simply going to allow a decentralised shadow payments system to emerge without any regulatory oversight is fantastical, and if the use of cryptoassets becomes more widespread, we can expect beefed-up regulation to follow suit.”

Bitcoin and cryptocurrency prices have surged since last year thanks to increased institutional adoption. 

There has also been a vast increase in the number of retail investors over the last year, as we have seen from the rise of so-called meme stocks such as AMC (AMC) and Gamestop (GME). The cryptocurrency market has faced similar retail investor-led growth. 

Research published by the FCA last week estimates that 2.3 million adults now hold cryptoassets in the UK, up from 1.9 million last year.

Binance alone recorded crypto trading volumes equivalent to $1.5tn last month, according to data from TheBlockCrypto.

Regulators have been cracking down on the industry of late amid concerns of illicit activities and consumer protection.

They are concerned about the potential for consumer harm in the cryptocurrency market, both through fraudulent activity and from losses sustained from crypto trading.

Some 14% of people have borrowed money to fund their investment, leaving them at high risk of suffering losses and being saddled with a debt hangover.

Read more: Cryptocurrency crimes hit 8,000 a year as scammers flock to the market

It comes as the number of money laundering and fraud cases continues to rise globally. According to a report from Action Fraud, an estimated £113m was lost to cryptocurrency fraud in 2020.

It received 7,014 complaints in the year to March 2021 compared with 3,608 in the previous 12 months. In just four years, reports of such crimes have gone up by 1,150%.

Bitcoin has the most crime reports of any currency, totalling 23,492 reports since 2016, which the report said “can be expected” as it is the most dominant crypto in the market.

The most common types of fraud include crypto scam initial coin offerings (ICO): scammers lure investors with an ICO for a fabricated cryptocurrency, often taking information from legitimate coin sites to appear more convincing.

As new currencies enter the market often, this can seem like an attractive investment to ‘get in quick’, only to find it was all fake.

Another type of fraud is called "crypto pump and dump schemes" where a small group of investors will pump money into a low value coin and convince private investors to follow suit so the group can sell their shares for a profit.

Read more: Dogecoin plunges on China action, bitcoin slides

Although the FCA has restricted Binance from offering services in the UK, Brits can still access Binance’s services in other jurisdictions to speculate on the price of cryptocurrency going up or down.

Binance said it takes “a collaborative approach in working with regulators and we take our compliance obligations very seriously”.

It added: “The FCA notice has no direct impact on the services provided on Binance.com. Our relationship with our users has not changed.

“We are actively keeping abreast of changing policies, rules and laws in this new space.”

A growing number of crypto asset firms are abandoning attempts to register with Britain's financial regulator as global scrutiny of the rapidly-growing sector intensifies. The Financial Conduct Authority (FCA) banned Binance, one of the world's biggest crypto exchanges, on Friday from conducting any regulated activity in Britain as regulators across the world bolster oversight of the crypto sector. Data on registrations shows the number which have been ditched has jumped by a quarter in less than a month, an FCA spokesperson said on Monday, adding that Binance withdrew its application in mid-May, without giving further details.

(Bloomberg) -- The U.K.’s financial watchdog just took one of the most significant regulatory moves to date against a crytocurrency exchange as global scrutiny of the industry hardens.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

The City watchdog has banned one of the world’s largest Bitcoin exchanges from offering regulated services in Britain amid mounting fears over the rise of cryptocurrency crime. The Financial Conduct Authority ordered Binance Markets Limited to remove all advertising and financial promotions by Wednesday and told the firm it must not carry out any regulated activities in Britain without prior consent. The FCA’s action comes just two days after the Japanese financial regulator issued a consumer wa

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LONDON (Reuters) -Britain's financial regulator has said Binance, one of the world's largest cryptocurrency exchanges, cannot conduct any regulated activity and issued a warning to consumers about the platform, which is coming under growing scrutiny globally. In a notice dated June 25, the Financial Conduct Authority (FCA) said Binance Markets Ltd, Binance's only regulated UK entity, "must not, without the prior written consent of the FCA, carry out any regulated activities... with immediate effect".

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Bitcoin rises as UK financial watchdog bans Binance cryptocurrency exchange

Yahoo Finance 28 June, 2021 - 04:13am

Over the weekend the Financial Conduct Authority (FCA) ordered Binance Markets to remove all advertising and financial promotions by Wednesday 30 June. In one of the most significant moves by a regulator to date, the FCA said that the firm must not carry out any regulated activities in Britain without prior consent.

Binance, which was founded by Canadian-Chinese developer Changpeng Zhao, is now required to make clear on its website, social media platforms, and all other communications that it is no longer permitted to operate in the UK.

Despite the ban, Bitcoin rose more than 5% on Monday to $35,017 (£25,188), although it is still lower than at the start of the month following China’s recent crackdown on bitcoin miners.

The wider cryptocurrency market also pushed ahead, with ethereum (ETH-USD), the world’s second largest coin, up 10% as average transaction fees on the coin dropped to their lowest since December 2020. Elon Musk-favourite dogecoin (DOGE-USD) also climbed 3.4%.

According to CoinGecko, the broad crypto space was up around 8% to $1.43tn on Monday morning.

“We’re seeing the $30,000 level on bitcoin being defended quite well with a number of tests at that level over the past month,” Vijay Ayyar, head of Asia-Pacific at crypto exchange Luno Pte, told Bloomberg.

“We saw a lot of downward pressure on prices being defended, so this looks quite bullish at this point.”

It comes amid a crackdown on the cryptocurrency sector as money laundering and fraud cases rise globally. It also comes just days after the Japanese financial regulator issued a consumer warning against Binance.

US and German regulators have also raised concerns over the firm’s activities in the past.

Since the start of this year, crypto-related businesses must register with the FCA before doing business in the UK, however, most firms have been granted “temporary registration” until July. Earlier this month, the watchdog said that just five firms had registered, and that the majority were not yet compliant.

On Sunday, Binance said on Twitter: “Binance Markets 'does not offer any products or services via the Binance.com website'. The Binance Group acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions.”

Binance Group is currently based in the Cayman Islands, while Binance Markets Limited is an affiliate firm based in London.

A spokesman for the FCA said: “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.

“The action taken on Binance Markets Limited has been in train for some time.”

Of the firms assessed, more than 90% have withdrawn applications following the FCA’s intervention.

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"First and foremost is the potential for consumer harm, both through fraudulent activity and from losses sustained from crypto trading," Laith Khalaf, financial analyst at AJ Bell, said. 

"FCA data released last week showed that over two million Britons now hold crypto, and while the majority appeared to be taking a sensible and measured approach, 14% had borrowed money to fund their investment, leaving them at high risk of suffering losses and being saddled with a nasty debt hangover."

He added: "Financial watchdogs will also be keeping an eye on systemic risks that might emerge from crypto markets. The financial crisis was a wake-up call to governments across the world that even with considerable oversight, financial markets can build up a head of steam that leaves them hurtling towards a cliff edge. 

"Crypto markets aren’t big enough to pose a serious systemic threat right now, but should they continue to grow and proliferate, regulators won’t be complacent on this front.

Over the weekend the Financial Conduct Authority (FCA) ordered Binance Markets to remove all advertising and financial promotions by 30 June.

LONDON (Reuters) -Britain's financial regulator has said Binance, one of the world's largest cryptocurrency exchanges, cannot conduct any regulated activity and issued a warning to consumers about the platform, which is coming under growing scrutiny globally. In a notice dated June 25, the Financial Conduct Authority (FCA) said Binance Markets Ltd, Binance's only regulated UK entity, "must not, without the prior written consent of the FCA, carry out any regulated activities... with immediate effect".

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