Last Updated: July 27, 2021
The Financial Conduct Authority, which is the UK’s financial regulator, has stated that Binance and all of its group entities, “are not permitted to undertake any regulated activity in the UK.” The FCA has also banned Binance from advertising or marketing its products in the UK.
The move comes after growing concerns amongst financial regulators across the world about the possible misuse of blockchain technology and cryptocurrencies by illegal activities such as money laundering.
Binance has faced such issues from financial regulators before this as well. Previously, the company faced flack from regulators in the US, Japan, Germany, and other countries.
What is Binance?
Binance is a cryptocurrency exchange that is based in the Cayman Islands. The company operates a digital platform through which traders can buy and sell cryptocurrencies. Binance is home to more than 1.3 million transactions every second. By trading volume, Binance was the world’s largest such exchange as of April 2021.
Binance and its group entities also take part in other ventures such as charity, finance, education, research, and more.
Binance was first founded in China in 2017. However, the company had to shift its operations due to a clampdown by the Chinese government.
The company was founded by Changpeng Zhao, who is also known by the monicker “Cee-Zee”. The 44-year old has built a net worth of more than $2 billion. He has insisted that the company does not have any official headquarters since it is not required for a business that is based on cryptocurrencies.
What is the Impact of the Ban?
Since Binance does not operate out of the UK, the ban does not affect the company’s current businesses. However, if Binance or any of its group entities want to enter the UK market properly, they will need prior written consent from the FCA.
Many UK citizens are already involved in transacting through Binance’s exchange. It is unclear whether the ban will have an effect on such ongoing activity.
For now, Binance is legally required to display a warning to UK users stating that Binance is not authorized by the FCA or any regulator from the UK.
The cryptocurrency industry is experiencing growing pains. Many commentators have compared the pushback that cryptocurrency ventures are witnessing to the early days of the internet. It is possible that cryptocurrency products may become more acceptable over time, however, the next few years may have a significant impact on the direction that cryptocurrencies take.