Binance, the world’s largest crypto exchange, has officially canceled registration in the United Kingdom (UK) with the local financial watchdog, the Financial Conduct Authority (FCA). Binance Markets Limited (BML) will no longer offer regulated activities and products in the UK. On May 30, 2023, the UK FCA finalized BML’s request to deregister the company ending its authorization to provide regulated services within the country.
Binance continues to face global regulatory pressure, resulting in the company withdrawing from significant markets. While the termination of BML, Binance’s United Kingdom-based subsidiary, registration with the FCA may seem important, it will not impact the exchange’s operations. This is because BML has yet to conduct any business or have users in the UK. Binance Spokesperson noted, “This decision has no impact on Binance.com, which does not own or operate any crypto services in the UK and is only available to UK consumers on a reverse solicitation basis.”
Details of Binance’s Deregistration in the UK
After BML’s deregistration, the FCA said:
“Following the completion of the cancellation of permissions, the FCA no longer authorizes the firm. No other entity in the Binance Group holds any form of UK authorization or registration to conduct regulated business in the UK.”
Binance Spokesperson said that BML has held various FCA permissions for activities it never carried out or offered in the UK. The Spokesperson added:
“As these permissions were unlikely to be required in the future, Binance Markets Limited decided that it would be prudent to cancel them in line with the FCA’s recommendations to keep these updated.”
Binance’s Sub-Regional Manager for Growth in the UK and Europe, IIir Laro, took to social media to point out that Binance still holds five regulated entities in Europe, including Sweden, Poland, Spain, Italy and France. The deleted post had over 86.9K views and said, “Some more FUD. Let’s address it: Cyprus – we have withdrawn our VASP registration as we prepare for MiCA. Holland – We have stopped offering services due to obtaining a local license. Nigeria – the complaint is against “Binance Nigeria Limited”, which is not owned by Binance.”
Previous Regulatory Hurdles for Binance
On June 19, 2023, Binance denied affiliation with an entity registered in the UK, posted by insiders at Bitcode Method. The company rejected the claim that it has been using a small building shared with thousands of other companies as its registered office in the UK. According to a Binance spokesperson, the registered organization is not a Binance entity.
A tumultuous past has marked Binance’s relationship with the UK regulator. On March 14 2023, Binance stopped allowing UK customers to withdraw or deposit funds in British Pounds following the termination of its operational agreements with local partner Paysafe starting on May 22 2023. According to the email, the change impacts less than 1% of its users, it does not affect their accounts, and certain functionalities remain unchanged.
In a statement, Paysafe noted, “We have concluded that the UK regulatory environment about crypto is too challenging to offer this service at this time and so this is a prudent decision on our part taken in an abundance of caution.”
On June 27, 2021, UK’s financial watchdog, FCA, ordered Binance to cease all regulated activities in the country. The FCA noted that it does not authorize firms to advertise and sell investments in crypto assets. The news came right after Binance’s Chief Strategy Officer Patrick Hillmann highlighted the company’s commitment to be regulated in the UK.
On March 12, 2021, the United States Commodity Futures Trading Commission investigated Binance regarding possible trades by US-based customers. Responding to the investigation, Binance’s spokesperson said: “We do not comment on communications with any regulators as a matter of policy. We can say that we take a collaborative approach in working with regulators worldwide, and we take our compliance obligations very seriously.”
On May 13 2021, the United States Department of Justice and Internal Revenue Service placed Binance under investigation for illegal transactions. The allegations against Binance included misleading practices and manipulative trading. However, on June 17, 2023, Binance and the American regulators reached a settlement that ensures that global Binance executives are restricted from accessing the private keys of digital wallets and hardware wallets or obtaining root access to Binance.US’s tools on Amazon Web Services. The settlement dismissed a previously instated temporary restraining order (TRO) that could have immobilised all Binance.US assets.
As it stands, BML is no longer an FCA-authorised firm. As it navigates through challenges, it remains to be seen how Binance will adapt to regulatory frameworks and maintain its position in the crypto industry.
