Cryptocurrency Exchange Binance Banned In The UK
The UK has banned Binance until it removes all advertising and financial promotions, and registers. UK's Financial Conduct Authority has warned consumers of Binance Markets Ltd., banning it from engaging in any regulated activity within the country. While trading of cryptocurrencies is not directly regulated in the UK, offering services such as trading in cryptocurrency derivatives does require authorization.
Per the FCA's register, Binance has until Wednesday evening to confirm it has removed all advertising and financial promotions. In addition, the exchange must make clear on its website, social media channels, and all other communications that it is no longer permitted to operate in the U.K. Since January, the FCA has required all firms offering cryptocurrency-related services to register and show they comply with anti-money laundering rules. Only five firms had registered, and the majority are not yet compliant.
Binance won’t be able to resume U.K. operations without prior written consent. It is part of a broader crackdown on cryptocurrencies amid concerns that they may be used for money laundering and fraud.
So What Went Wrong?
Binance withdrew an application related to the anti-laundering directive 5MLD on May 17. According to the FCA, “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,”
Of the firms assessed, more than 90% have withdrawn applications following the FCA’s intervention. Recently, Japan's Financial Services Agency issued a warning against Binance, saying it offered crypto services without registration. Furthermore, Binance Holdings Ltd. is under investigation by the Justice Department and Internal Revenue Service, in efforts to root out the illicit activity. The probe is part of a larger inquiry, money laundering and tax offenses. Binance is currently led by Changpeng Zhao.
After the announcement, Bitcoin traded 6.1% higher at $33,227, up from $33,091 earlier. It is not uncommon for crypto bulls to view tough regulatory action as evidence of market maturity.
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