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One of the largest crypto exchanges in the world, Binance, has been ordered to stop all regulated activities in the U.K. by the Financial Conduct Authority (FCA). The financial regulator also warned consumers against online adverts and on social media promising high returns for investments in crypto assets.
“Binance Markets Limited is not permitted to undertake any regulated activity in the UK,” the FCA said in a post on its website. “This firm is part of a wider Group (Binance Group).”
The regulator emphasized that it has not granted any license or authorization to the crypto exchange or any of its subsidiaries. “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,” the agency added. “No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK.”
According to the regulator, the crypto exchange has been offering its services to UK clients via its site. “The Binance Group appears to be offering UK customers a range of products and services via a website, Binance.com,” the FCA said.
Trading in cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) is not regulated in the UK. However, some related activities, such as selling crypto derivatives, require approval.
“While we don’t regulate cryptoassets like Bitcoin or Ether, we do regulate certain cryptoasset derivatives (such as futures contracts, contracts for difference and options), as well as those cryptoassets we would consider ‘securities’,” the FCA explained. “A firm must be authorised by us to advertise or sell these products in the UK.”
The regulator also warned consumers about online advertising on crypto investments. “Be wary of adverts online and on social media promising high returns on investments in cryptoasset or cryptoasset-related products,” the FCA said.
The FCA explained that these are not regulated and investors might find themselves with no legal recourse should a problem arise. “Most firms advertising and selling investments in cryptoassets are not authorised by the FCA,” the regulator added. “This means that if you invest in certain cryptoassets you will not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong.”
In response to FCA’s warning, the crypto exchange explained that Binance Markets Ltd. is "a separate legal entity and does not offer any products or services via the Binance.com website,” according to Cointelegraph.
“The Binance Group acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions,” the crypto exchange tweeted. “The FCA UK notice has no direct impact on the services provided on http://Binance.com.”
