What is Binance?
Binance.com is a centralised online exchange platform, offering users a range of financial products and services, including purchasing and trading digital currencies, as well as digital wallets, securities, savings accounts and even lending.
Where do the FCA stand?
The Financial Conduct Authority refuses Binance from conducting any “regulated activity” within the United Kingdom and iterates that no entity in the ‘Binance Group’ holds any form of authorisation to do so. This comes with an official warning for consumers, advising them to stay cautious of adverts promising high returns on crypto asset investments.
Do the FCA regulate crypto currencies?
As of now, the FCA does not regulate crypto-currencies themselves, but it does keep a keen eye on crypto assets, which are regulated. This means that people in the UK should no longer use Binance in order to speculate on whether the price of crypto-currency will go up or down. However, users are still permitted to use Binance.com to purchase and sell crypto currencies as this remains an unregulated grey area.
What issues have Binance faced elsewhere?
Binance Group is currently based in the Cayman Islands, while Binance Markets Limited is an affiliate firm based in London. The firm has multiple entities dotted around the world and Binance Group was previously based in Malta. Internationally, this is not the first time that Binance has come under scrutiny over global operations; in fact, in the US (under the entity ‘Binance Holdings’) the company had been the subject of a review conducted by the Securities and Exhange Commission: the SEC. The outcome of which, led to another consumer warning to be released in April 2021, very similar to what we see today from the FCA. The Ontario Securities Commission (OSC) accused crypto trading platforms of failing to comply with key provincial regulations. Subsequently, an announcement was made on Saturday, stating that Binance will be pulling out of Ontario, Canada. One particular service offered by Binance is the ability to use local currency to purchase digital currencies – known in the industry as: fiat on-ramp. In mid-June, Silvergate Bank, a US partner of Binance, opted to stop processing US dollar withdrawals or deposits altogether. Furthermore, on Friday, Japan’s Financial Services Agency (FSA) issued a warning to Binance for the second time in three years reminding the company that it is operating in the country without full permission or compliance.
Will Binance remain standing?
Binance claims that not all its’ entities are connected to it directly. However, Nick Soprano (co-founder of the crypto-currency Divi and the blockchain payments ecosystem Divi Project) comments:
“Binance has over the course of their operations, moved several times to new jurisdictions … that’s not uncommon for these fledgling crypto businesses…if the regulations don’t suit their needs, they just move their operations.”