Binance Responds to the UK FCA’s Decision to Prohibit Operation in the Country
YESTERDAY, the UK’s Financial Conduct Authority issued a warning to Binance Markets Limited and the Binance Group, making it clear that Binance Markets Limited could not operate in the country as it is currently doing.
Binance Markets Limited is not permitted to undertake any regulated activity in the UK. This firm is part of a wider Group (Binance Group).
Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA.
No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK.
FCA: Binance Markets Limited Cannot Offer Derivatives in The UK
According to the official note, derivatives offerings are strictly prohibited for Binance as they are considered regulated products by the FCA.
That is to say, as per British law, any firm that wants to offer or promote derivatives -such as futures, swaps, options, or tokenized shares- must be registered and have the corresponding authorization.
A derivative is a type of security in which the parties agree that its value will depend on an underlying asset, for example, the price of a Tesla stock or the price of Bitcoin at a set point in time.
Binance is also obliged to publish a disclaimer on its social media sites and homepage warning that “Binance Markets Limited is not permitted to undertake any regulated activity in the UK.”
However, the FCA clarifies that the restrictions apply only to derivative products, recognizing that spot trading of cryptocurrencies is outside its regulatory powers.
Binance: Nothing Has Really Changed (For Now)
As scary as it may seem at first glance, the warning might not change much about the situation in which Binance currently operates.
Binance Markets Limited is not the entity offering derivatives in the UK. With Binance being a global corporation based outside the country, the FCA rules do not apply to the full spectrum of Binance Group firms.
Also, it is important to note that Binance clients can continue using the platform, knowing that the UK authorities are under no obligation to protect them in the event of an eventuality.
Binance responded through its Twitter account, assuring that “the FCA UK notice has no direct impact on the services provided on http://Binance.com” and that its relationship with its users has not changed.
We are aware of recent reports about an FCA UK notice in relation to Binance Markets Limited (BML).
BML is a separate legal entity and does not offer any products or services via the https://t.co/QILSkzx7ac website. (1/4)
— Binance (@binance) June 27, 2021
The world’s largest crypto exchange explained that in addition to being a whole other entity, Binance Markets Limited is not currently operational.
That is, the FCA’s warning is not, in fact, applicable to any of Binance’s branches right now.
So there’s no need to worry. And it seems like crypto traders know it. The news didn’t cause any major panic episodes. Instead, BTC recovered a little bit, spiking over 4% in the last 24 hours.