The financial watchdog bans the Binance cryptocurrency exchange in the UK

The UK’s financial watchdog has ordered Binance to stop all regulated activities in the UK and has set strict requirements in the face of harsh criticism from one of the world’s largest cryptocurrency exchanges.

The intervention of the Financial Conduct Authority in recent days is one of the most significant moves by a global regulator against Binance, a widespread digital asset company with subsidiaries around the world. The exchange has until Wednesday afternoon to confirm that it has complied with the guardian’s requests.

The intervention is a sign of how regulators are tackling the cryptocurrency industry because of concerns related to the role it can play in illegal activities such as money laundering and fraud and weak consumer protection.

The FCA also issued a consumer warning over the weekend to Binance holding company registered in the Cayman Islands and Binance Markets Limited, a London subsidiary controlled by chief executive Changpeng Zhao and overseen by UK regulators.

“Binance Markets Limited is not authorized to operate in the UK,” the FCA said, adding that “another entity in the Binance Group is not licensed, registered or licensed to operate in the UK”.

The group did not immediately respond to FT’s request for comment, but had previously said it “takes very serious compliance obligations and is committed to meeting the requirements of local regulators in the areas where we operate.”

Binance Markets Limited is not supported by the FCA’s cryptocurrency register, which is necessary for groups in the UK that offer digital asset services.

The entity applied to be a crypto-currency company registered with the regulator, but last month issued that request according to two people who knew the situation. The Watchdog has confirmed that the request has been canceled “following the FCA’s intensive commitment”.

The focus of the FCA’s decision on whether to approve these requests is based on a review of money laundering controls and practices to prevent terrorist financing.

Binance is one of the leading operators in the fast-growing crypto market wide services for customers around the world, trading in dozens of digital currencies, futures, options, stock tokens, as well as savings accounts and loans. According to data from TheBlockCrypto, it recorded crypto trading volumes of $ 1.5 million last month.

As part of the FCA’s actions, the regulator ordered Binance to display it on its website next Wednesday: “BINANCE MARKETS LIMITED IS NOT ALLOWED TO CARRY OUT REGULATED ACTIVITIES IN THE UK”. Binance Markets Limited “must secure and store all records and / or information.” . . Relating all UK consumers from their systems ”and stopping advertising and financial promotions.

Binance Markets Limited was set up a year ago as part of a plan to launch a UK-focused exchange for wider groups, Binance UK, which would be “closed” from global operations, knowing the subject by public documents and two people. Although the FCA has restricted Binance from providing services in the UK, British citizens may access Binance’s services in other jurisdictions.

In London, Binance Markets Limited, which was authorized by the FCA to provide investment services to consumers in traditional currencies, was acquired by Binance by buying a financial company that was already registered with the regulator. The FCA approved the transaction last June, according to public documents.

The FCA’s decision by the Japan Financial Services Agency warned last week that Binance was conducting unauthorized cryptocurrency trading with Japanese citizens. This is the second time the FSA has warned about Binance in 2018 after the same notice was published.

The German financial watchdog warned investors in April As Binance probably violated the securities rules by trading the stock token, the exchange tried unsuccessfully appeal.

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Additional report by Robin Harding in Tokyo