What impact does the FCA decision in the UK have on Binance’s business?
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Answer What impact does the FCA decision in the UK have on Binance’s business?
Yesterday, the UK’s Financial Conduct Authority issued a warning to its subsidiary, Binance Markets Limited, stating that Binance Markets Limited cannot operate in the country as it currently does.
The Financial Regulatory Authority (FCA) has stated that Binance will not be allowed to conduct any regulated activity in the UK.
Due to the recent decision by the FCA, Binance Markets Limited is currently not permitted to conduct any regulated activities without the prior written approval of the FCA, as the latter indicated:
No other entity in the “Binance Group” holds any form of authorization, registration or license in the United Kingdom to conduct a regulated activity in the United Kingdom.
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FCA: Binance cannot offer derivatives trading in the UK
According For an official noteDerivative offerings are strictly prohibited on Binance as they are considered FCA regulated products.
This means, according to British law, that any company wishing to offer or promote derivatives, such as futures, swaps, options or shares tokenized in the form of digital currencies must be registered and have the appropriate authorization.
A derivative is a type of security in which the parties agree that its value will depend on the underlying asset, for example, the price of a Tesla stock or the price of Bitcoin at a specific point in time.
The FCA makes clear that the restrictions only apply to derivative products, while recognizing that spot trading in cryptocurrencies is outside its regulatory mandate.
Binance: Nothing has really changed, at least for the time being
It may seem intimidating at first glance, but the warning may not change much about the situation in which Binance is currently operating.
Binance Markets Limited is not the entity offering derivatives in the UK.
Given that Binance is a global company based outside the United Kingdom, the FCA rules do not apply to the entire group of Binance Group companies.
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Also, it is important to note that Binance clients can continue to use the platform, knowing that the UK authorities are not obligated to protect them.
Binance responded through its Twitter account, confirming that the FCA notice has no direct impact on the services offered on the Binance platform and that its relationship with its users has not changed.
We are aware of recent reports on the FCA UK Notice regarding Binance Markets Limited (BML).
BML is a separate legal entity and does not offer any products or services through website. (1/4)
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– Binance (binance) 27 June 2021
Binance clarified that in addition to being another entity entirely, its subsidiary, Binance Markets Limited, is not currently in operation.
This means that the FCA warning does not, in fact, apply to any of the Binance affiliates at this time.
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