Misery Loves Company: Binance Problems Continue

Misery Loves Company: Binance Problems Continue

• The world’s largest cryptocurrency exchange, Binance, is facing major restrictions in the United Kingdom.
• The UK’s financial regulator has stated that Binance should not operate in the UK without an express approval.
• The decision by the UK regulatory authority comes at a time when Binance is facing a slew of challenges from regulatory agencies around the world.
• Binance has pulled out of Ontario following stiff measures taken against other cryptocurrency exchanges.

Binance operates the world’s largest cryptocurrency exchange with daily volumes regularly surpassing $15 billion. However, for all its size and global acceptance, the exchange has faced some major hurdles as it continues its growth.

The apex financial regulator for the United Kingdom, the Financial Conduct Authority, has declared that Binance should not carry out any regulated activities without the consent of the authority. This comes as a sequel to the Japanese counterpart agency who stated that Binance is not registered to carry out business in the country and the announcement that Binance will discontinue its service in Ontario.

Binance Faces Major Hurdle in the UK

The decision of the apex financial regulator in the United Kingdom to put restrictions on the regulatory activities of Binance comes as a rude awakening to the Binance community.

The Financial Conduct Authority announced over the weekend that Binance is “not currently permitted to undertake any regulated activities without the prior written consent of the FCA”

The regulatory agency went on to make a distinction between what falls within their scope of authority and what is beyond them. In the statement, it announced that it does not regulate crypto assets like Bitcoin but derivatives from crypto-assets like futures contracts and options are securities and therefore under their jurisdiction.

Any firm wishing “to advertise or sell these products in the UK” must be registered with the agency. According to analysts, Binance may not meet the requirements of the FCA and may be forced to cease operations in the UK

The FCA went on to issue a warning to investors to remain wary of adverts that promise “high returns in a crypto asset or crypto asset-related products.

More Trouble for Binance

Binance is in the midst of a raging storm as it faces dire challenges from regulatory agencies around the world. The Financial Services Agency, the premier financial market regulator in Japan has issued a stern warning to Binance following the cryptocurrency’s continued operations without authorization.

The statement accused Binance of carrying out operations without the consent of the FSA. This warning is the second that has been issued by the Japanese FSA to Binance with the first coming in 2018. This led to the change of headquarters by Binance from Japan to Malta.

Across the Pacific, Binance is also embroiled in another debacle with Canadian regulators. On Friday, Binance revealed that it was shutting down operations in the province of Ontario. The statement put out by the exchange read that “Binance can no longer continue to service Ontario-based users” and advised affected users to close their positions by December 31st, 2021. The reason for this may be a result of the fate of other crypto exchanges like Bybit, Poloniex, and KuCoin that have had actions filed against them for breach of the Ontario Security regulations.

On the Flipside

• Binance has stated that it has collaborated with law enforcement agencies to apprehend cybercriminals that laundered millions for the Clop ransomware gang.
• This comes amid investigations on the operations of the company by the U.S Justice Department and the IRS.
• The report which first came months ago revealed the CFTC was investigating whether Binance violated US law.

Largest Crypto Exchange – Binance

Founded in 2017 by Changpeng Zhao, Binance has grown to become the largest cryptocurrency exchange in the world in terms of volume. The exchange has a global reach although it has been banned in the USA.

Following its rise in popularity, the exchange has launched two cryptocurrencies called Binance Coin (BNB) and the Binance Smart Chain (BSC). At the moment Binance Coin is the fourth-largest cryptocurrency by market capitalization with a market cap of $45.61 billion.

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