Binance has almost solved all its problems in the UK. In fact, the Financial Conduct Authority (FCA) has reported that Binance Markets Limited has complied with all requirements; nevertheless, it cannot operate at the moment.
Binance’s troubles in the UK
Exactly two months ago, on June 26, the FCA announced that not Binance in total, but Binance Markets Limited was not authorized to operate in the UK.
To be precise, it also wrote in a special document that:
“Based upon the Firm’s engagement to date, the FCA considers that the Firm is not capable of being effectively supervised. This is of particular concern in the context of the Firm’s membership of a global Group which offers complex and high-risk financial products, which pose a significant risk to consumers.”
Binance Markets Limited is part of the Binance Group. Prior to assuming this name, it was known as EddieUK, which Binance then acquired in May 2020 with a simultaneous name change.
According to the FCA, from May 2020 to June 2021, Binance Markets Limited did not communicate any business plan or strategy to the UK authority. However, it also appears from the document that Binance Markets Limited was, in fact, not yet operational.
Although in the update to that communication, the FCA imposed requirements on Binance Markets Limited, it also adds that:
“These requirements remain in place, and BML is still unable to conduct regulated business in the UK.”
It is unclear how the exchange will proceed now. CEO Changpeng Zhao merely announced that Binance had complied with the FCA’s requirements and said in another couple of tweets that now that the issues have been resolved, it’s moving forward (though without specifying whether he was referring to Binance UK).
Binance and regulation
Binance has come under the crosshairs of several authorities. Not only the British FCA but also the Italian Consob has issued a warning against the sale of derivatives and stock tokens by Binance. Closely, the exchange suspended the sale of stock tokens everywhere and the sale of cryptocurrency derivatives in Germany, the Netherlands, and Italy.
From these measures, it is clear that Binance is doing everything it can to be compliant with national and international regulations.
After all, as Changpeng Zhao explained, the exchange is only four years old, and in this period, it has grown by leaps and bounds, just like the cryptocurrency sector. That is why “mistakes” have been made, which Binance is remedying by interacting with the various authorities.
Binance’s goal, in fact, is to become a regulated financial institution. For this to happen, the exchange will have to take every step the authorities require to be fully in line with the regulations.