The United Kingdom’s Financial Conduct Authority (FCA) published a warning this weekend, reminding consumers that popular cryptocurrency exchange Binance does not hold a regulatory license in the UK.
The warning comes amid a push by the FCA to get crypto-related firms to acquire a license with the regulator. So far, only five firms have been added to the FCA’s crypto register, with Mode App the latest to be added last week.
The FCA’s warning about Binance reads:
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.
According to 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 warning primarily notes that Binance Markets serves UK customers a range of products and services on the Binance.com website.
Is Binance Banned in the UK?
The short answer is, NO. In a follow-up statement, Binance clarified that its relationship with UK customers has not changed.
The FCA UK notice has no direct impact on the services provided on https://t.co/QILSkzx7ac.
— Binance (@binance) June 27, 2021
Our relationship with our users has not changed. (3/4)
The exchange noted that it had acquired Binance Markets Limited (BML), the entity named in the FCA announcement. BML "has not yet launched its UK business or used its FCA regulatory permissions," said Binance, adding that it has continued to work with regulators to ensure regulatory compliance.
It is worth noting that the long-term implications of the FCA announcement on Binance are yet to be known, especially in the wake of the regulator mandating exchanges to acquire an operating license in the region.
Earlier this year, the FCA introduced a law banning the sale of crypto derivatives to retail consumers in the UK. Another derivative platform, Bybit shutdown in the UK after it was served an FCA warning in March for a similar offense.
Binance offers such products to its global user base at Binance.com, and theoretically cannot block UK users from accessing only its spot trading market (without access to derivatives.)
When faced with similar situations in the past (the US is a prime example), Binance has opted to block users from regions where regulators do not permit their products. This is often accompanied by the launch of a region-focused platform, as shown by the launch of Binance US to serve US customers.
If Binance undertakes this approach, then the delayed launch of Binance UK last summer should accelerate in the coming weeks.
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