The
Financial Conduct Authority (FCA) has ruled that the firm cannot conduct any
"regulated activity" in the UK.
It
also issued a consumer warning about Binance.com, advising people to be wary of
adverts promising high returns on cryptoasset investments.
Binance
said the FCA notice would have no "direct impact" on the services it
provides from its website Binance.com.
Binance's
existing crypto exchange is not UK-based so despite the FCA ruling, there will
be no impact on UK residents who use the website to purchase and sell
cryptocurrencies.
The
FCA does not regulate cryptocurrencies, but requires exchanges to register with
them. Binance has not registered with the FCA and therefore is not allowed to
operate an exchange in the UK.
The
FCA move comes amid pushback from regulators around the world against
cryptocurrency platforms.
Binance.com
is an online centralised exchange that offers users a range of financial
products and services, including purchasing and trading a wide range of digital
currencies, as well as digital wallets, futures, securities, savings accounts
and even lending.
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.
The
FCA said that Binance Markets Limited (BML), which is owned by Binance Group,
is not currently permitted to undertake any regulated activities without the
prior written consent of the FCA. It has until Wednesday to comply with the
ruling.
The
regulator also stressed that no entity in the Binance Group holds any form of
authorisation, registration or licence to conduct regulated activity in the UK.
Nevertheless,
the FCA is sending a strong signal that it is worried about the dangers of
investing in cyptocurrencies in general.
The
reason it wants them all to register is because it's concerned about their
potential use as a cover for illicit activity - and it wants consumers to be
very careful indeed.
As
well as forbidding Binance from setting up an exchange in the UK, the regulator
is ordering its UK division to stop any form of advertising here by 30 June.
More significantly, it has until the end of this week to show the FCA that it
has stored records of all of its UK customers, ready to be handed over if necessary.
And
there's a message to UK consumers to check whether any crypto company is
registered with the regulator and, if it isn't, to consider withdrawing their
assets.
The
FCA cannot stop people from trading in cryptocurrencies - but it has got out
its biggest red flag and is waving it vigorously.
While Binance cannot offer a crypto exchange based in the
UK, British investors can still access the group's services through its
website Binance.com.
BML is a separate legal entity
and does not offer any products or services via the Binance.com website,' the group
tweeted.
And added: 'We take a
collaborative approach in working with regulators and we take our compliance
obligations very seriously. We are actively keeping abreast of changing
policies, rules and laws in this new space.'