The U.K.’s Financial Conduct Authority (FCA) has ordered crypto exchange Binance to stop undertaking any regulated activity in the country. But since the exchange pulled its application for the FCA’s crypto-assets register, it will be unable to offer unregulated services — such as spot trading — either.
The FCA announced on Saturday that Binance Markets Limited and the Binance Group do not hold any form of authorization to conduct regulated activities in the U.K., but still offer citizens a range of services online.
In the U.K., crypto-assets themselves, such as bitcoin and ether, are unregulated but certain trading products related to them, such as futures and options trading, are regulated.
Binance has been asked to stop undertaking any regulated activity in the U.K. by June 30. The FCA has also ordered Binance to display a notice on its website and social media that it is not permitted to undertake any regulated activity in the country.
“The Firm will remove, or where this is not practicable, give instructions for the removal of any advertising and financial promotions it currently has live, in whatever form they take by close of business on 30 June 2021,” said the FCA.
According to the watchdog, Binance must also preserve all records relating to all its U.K. consumers and notify the FCA in writing by July 2.
In 2020, the U.K. established a registration regime for crypto exchanges, announcing that they must get approval in order to provide any crypto services in the country. But the deadline for exchanges to be registered has been pushed back multiple times since just a handful of companies have managed to get registered.
The FCA is known to drill crypto firms before offering registration. To date, the watchdog has only approved five crypto companies: Two Gemini entities, Archax, Ziglu, Digivault, the custody business of Diginex, and Mode Global Holdings.
Binance announced the U.K. entity, Binance Markets Limited, in June 2020 after acquiring an FCA-registered firm called EddieUK. Later, Binance itself reportedly applied to become a registered crypto company with the FCA but pulled that application last month “following intensive engagement” from the watchdog.
The current deadline for existing crypto exchanges to get FCA approval in the U.K. is March 31, 2022.
“A significantly high number of crypto assets businesses are not meeting the required standards under the money laundering regulations, which has resulted in an unprecedented number of businesses withdrawing their applications,” an FCA spokesperson said.
According to the FCA, firms must either get approval by then or have a pending application to still offer such crypto services. Since Binance pulled its application, that means the exchange can no longer provide services that were previously unregistered either, such as spot trading.
The news comes at a time when Binance is said to be under scrutiny by regulators in the U.S. and Europe and has received another warning from Japan over its unregistered operations.
Binance did not immediately respond to The Block’s request for comment but has previously said, “we take a collaborative approach in working with regulators, and we take our compliance obligations very seriously.”
Binance is the largest crypto exchange in the world by trading volumes. It recorded over $1.5 trillion worth of trading volumes last month, according to The Block’s Data Dashboard.
