The UK’s Financial Conduct Authority (FCA) has ordered Binance to halt all regulated activities in the country. The world’s largest crypto exchange by trading volume must comply with the watchdog’s demands, but it will not turn British users away.
“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,” the regulator said in a statement on Saturday, June 26th.
The FCA further ruled that Binance must notify its users of the impending ban on its apps and website by Wednesday, June 30th. The crypto exchange is also prohibited from advertising its services in the UK.
As confirmed by an FCA spokesperson, the ruling’s scope is limited, however. Binance is now banned from offering regulated services but not from operating in the country altogether.
Speaking to CNBC, a Binance representative stated the ban would not have any effect on its services. The spokesperson also assured users that the organization’s relationship with them had not changed and that it was taking a collaborative effort to comply with changing policies.
The Reason Behind the Move
The FCA move comes amid increasing regulatory scrutiny against the crypto industry.
In January 2021, the FCA issued a stern warning to crypto users regarding the market’s speculative nature. It warned them that they should be ready to lose their money should they decide to invest in digital assets.
An AJ Bell financial analyst, Laith Khalaf, also shed some light on the situation. In an email to CNBC, he said that the FCA was cracking down on altcoins or derivatives. Unlike primary cryptocurrency assets like bitcoin, their trading is not under regulation.
Khalaf further added that it would be unreal for policymakers to allow shadow payment options without any rules and policies.