Binance Can't Do Business in UK But Crypto Trading Unaffected: British Financial Watchdog
Editor's note: This article has been updated with clarifications from the Financial Conduct Authority.
Binance cannot operate in the UK, said the UK’s top financial watchdog, but Britain's crypto traders can continue to use the exchange.
Confused? We were, too, so we called up the Financial Conduct Authority and asked them to clarify.
The ban, said an FCA spokesperson, only applies to Binance's English incorporation, Binance Markets Limited, which Binance has not registered with the FCA (despite plans to do so).
The spokesperson clarified that "UK consumers can continue to interact" with Binance Group, the wider, international version of Binance companies that has no global office. That means that Binance's customers in the UK can place trades as normal—nothing changes.
This distinction is critical, and explains how Binance has continued to offer margin and derivatives trading to UK consumers despite the FCA's ban on crypto derivatives in January.
"As of now, Binance group is providing service to the UK customers. It is not from Binance Markets Limited," a customer support rep for Binance told Decrypt.
The FCA spokesperson said it's taking a "close look at how the wider group interacts with UK consumers," but foisted the responsibility on Binance to "ensure they understand all applicable regulatory requirements in the jurisdictions where they operate."
Binance Markets Limited owns the upcoming Binance.UK, a local version of Binance that would let British customers open virtual bank accounts. It was supposed to launch last summer but never received FCA approval.
While crypto companies that haven't registered with the FCA can still serve UK customers, they have had to apply for registration since last January and must complete their registration by next March.
Binance Markets Limited is among the 90% of crypto businesses that have withdrawn their applications to register with the FCA. Binance withdrew its application on May 17 “following intensive engagement from the FCA.”
The FCA didn't say why Binance Markets Limited withdrew its application, but noted that other companies pulled out of the process because they failed to meet the FCA's strict anti-money laundering standards.
In a notice Friday, the Financial Conduct Authority said that Binance Markets Limited must stop advertising to UK customers and collect data on them.
And by Wednesday, Binance must publish the following on its website and social media channels: “BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK.”
Two days ago, Japan’s Financial Services Agency warned Binance customers that the exchange had not registered with the regulator. Last summer, Malaysia Securities Commission declared Binance illegal but the company has continued to operate there.
A Binance spokesperson did not respond to inquiries from Decrypt. A customer support officer said, “We are now unable to provide further information. Please kindly wait for further announcement.”Source