Britain bans cryptocurrency exchange Binance from operating in the UK without ‘written consent’

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Binance CEO, Changpeng Zhao.

  • Britain’s financial regulator has ordered Binance to stop all regulated activity in the UK.
  • The watchdog also issued a warning to potential crypto investors, telling them to be “wary” of promises of big returns.
  • Binance’s CEO has previously said the company is “very regulated.”
  • See more stories on Insider’s business page.

Britain’s financial watchdog warned that cryptocurrency exchange Binance is not permitted to be operating in the UK without its express approval.

The Financial Conduct Authority, the regulator for some 60,000 financial services firms and financial markets in the UK, said Saturday that “Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA.”

Binance Markets Limited is part of the wider Binance Group, operating the world’s largest cryptocurrency exchanges.

The watchdog also issued a warning to potential crypto investors. “Be wary of adverts online and on social media promising high returns on investments in cryptoasset or cryptoasset-related products,” it advised.

“While we don’t regulate cryptoassets like Bitcoin or Ether, we do regulate certain cryptoasset derivatives (such as futures contracts, contracts for difference and options), as well as those cryptoassets we would consider ‘securities,'” the FCA statement said. “A firm must be authorised by us to advertise or sell these products in the UK.”

Binance did not immediately respond to Insider’s request for comment.

The ban in Britain comes a day after Japan’s financial regulator, the Financial Services Agency, warned that Binance is not registered to do business in that country.

Earlier this year, Germany’s financial watchdog, BaFin warned the company may have breached securities trading rules after it allowed non-US users to trade tokenized versions of some US stocks, including Tesla, Coinbase, and MicroStrategy.

Binance, which does not have a single location for its headquarters, typically allows users to trade crypto derivatives – including futures and options. But as retail traders warmed up to round-the-clock stock trading in the past year, the exchange offered investors the option to trade fractions of shares using a German broker as an intermediary, according to the Financial Times.

CEO Changpeng Zhao has previously said in a Bloomberg interview the company is “very regulated.”

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A key US watchdog wants officials to set up a ‘regulatory perimeter’ for cryptocurrencies

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Critics have long highlighted bitcoin’s use in crime.

  • A US banking regulator said he would like to see a “regulatory perimeter” for cryptocurrencies.
  • Michael Hsu told the Financial Times that there was growing interest in regulating crypto.
  • US and global officials have expressed concerns that retail investors could get burned by bitcoin.
  • See more stories on Insider’s business page.

The US’ Comptroller of the Currency has said he hopes officials will set up a “regulatory perimeter” for cryptocurrencies.

Michael Hsu, who oversees the country’s national banks, told the Financial Times that agencies overseeing the US financial system want to coordinate “a lot more” on the $1.5 trillion cryptocurrency market, which has boomed in 2021 but crashed sharply two weeks ago.

The comments were one of the clearest signs yet that US regulators plan to take a more active role in the cryptocurrency market.

“It really comes down to coordinating across the agencies,” Hsu said. “Just in talking to some of my peers, there is interest in coordinating a lot more of these things.”

Officials around the world worry that the crypto boom is sucking in amateur traders who could get badly burned. Bank of England governor Andrew Bailey said earlier in May that people should “buy them only if you’re prepared to lose all your money.”

In the US, there are growing signs that President Joe Biden’s administration wants to take a more hands-on approach than Donald Trump’s White House.

Biden’s Treasury Secretary Janet Yellen said in February that “the misuse of cryptocurrencies and virtual assets is a growing problem.” She highlighted their use in money laundering, terrorism and drug trafficking.

Hsu, who was appointed as Acting Comptroller by Yellen, said innovation in finance through technologies like blockchain and the rise of fintech companies reminded him of the financial crisis. He said new technologies brought great promise, but also great risk.

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