The Financial Conduct Authority has ordered Binance – one of the biggest crypto exchanges in the world – to halt all activities, following on from a recent crackdown on crypto trading in China.
Other countries are expected to follow suit in the coming days and weeks with concerns over the regulation of cryptocurrencies, but Britain's financial regulator decided to act sooner and issued the order last Friday – June 25.
The post on the FCA website reads as follows: “Binance Markets Limited is not permitted to undertake any regulated activity in the UK. This firm is part of a wider Group (Binance Group).
“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 licence to conduct regulated activity in the UK.
“The Binance Group appear to be offering UK customers a range of products and services via a website, Binance.com.”
The FCA website goes on to advise consumers of the risks when investing in what it calls 'cryptoassets' rather than cryptocurrencies, pointing to a lack of FCA approval in most cases and as such no assistance available from either the Financial Ombudsman Service or the Financial Services Compensation Scheme.
So far Binance has not commented on the matter, though the FCA did add that the UK – since January 2021 – requires all companies offering services relating to cryptos to be registered with them and to demonstrably prove they comply with anti-money laundering rules. At present only five firms have registered – and the majority of those aren't even compliant yet. It is perhaps unsurprising then that the Financial Conduct Authority is starting to take action six months on, and this could be the first of many aggressive moves to pull cryptos in line.