Yerevan (CoinChapter.com) – The Financial Conduct Authority (FCA), UK’s financial watchdog, has placed a ban on all regulated activities of Binance in Britain. According to the FCA’s latest diktats, Binance “must not, without the prior written consent of the FCA, carry out any regulated activities… with immediate effect“.
Binance is an online exchange platform. The company offers users a range of financial products and services. Using the Binance centralized platform, customers can purchase and trade a wide range of digital currencies. The company even has a digital wallet. Customers can even open a savings account with the company, among other facilities that the platform offers.
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Binance must confirm if it has complied with the FCA’s demands until Wednesday evening.
In the meantime, FCA has also issued a warning to consumers about Binance Markets and Binance group.
Subsidiary angle
To an unsuspecting reader, the news may come as a ban on the Binance platform in general.
However, the latest ban imposed by the FCA concerns Binance’s subsidiary, the Binance Markets Limited. Binance Group is currently the largest cryptocurrency exchange in the world. The company is based in the Cayman Islands. Binance Markets Limited, on the other hand, is an affiliate firm based in London. The firm has multiple such partner entities dotted around the world.
On June 16, 2020, Binance announced that it had bought an FCA-regulated entity and would use it to offer cryptocurrency trading services using pounds and euros.
“We are excited to share the upcoming launch of Binance.UK, a new digital and crypto asset marketplace for buying and trading cryptocurrencies with British Pounds (GBP) and Euros (EUR), coming this summer. Designed for U.K. retail and institutional investors alike, including crypto novices, Binance.UK will also serve European customers. Binance.UK will be operated by Binance Markets Limited”,
the Press Release on the company’s website read.
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The FCA diktat clarified that Binance Markets could not undertake regulated activities without consent from them. Meanwhile, Binance Group entities cannot hold any form of UK authorization, registration, or license to conduct a regulated activity in the UK.
Binance confirmed that it had not yet launched its UK Business or used the FCA’s regulatory permission, which it acquired.
Dodging The FCA Bullet
Unlike what one usually expects in such situations, the FCA’s ruling did not negatively impact Binance Coin (BNB).
Binance’s existing crypto exchange is not based out of the UK. Thanks to this, there will be no impact on UK residents using the website to purchase and sell cryptocurrencies.
While the FCA does not regulate cryptocurrencies, it expects exchanges to register with them. However, Binance Global and Binance Market Limited are not registered with the FCA. As a result, the FCA curbed their activities. Even the website of Binance.The UK, which Binance Market Limited was to use to provide services, is not yet functional.
Also read: Dead Cat Bounce? Binance Coin (BNB) Rebounds 79% On Altcoin Market Recovery
One of the major reasons Binance could mitigate possible damage is the company’s hyperactive reaction to the news. Through a series of tweets, Binance Global reassured its users that FCA’s diktat would not impact the services provided by the platform.
“BML is a separate legal entity and does not offer any products or services via the http://Binance.com website.”
Judging by market conditions, BNB has reacted to the fluctuations caused by market leader Bitcoin (BTC).
The trends set by BTC may have caused the slight drop and rise of BNB prices. Being the largest and most popular cryptocurrency, the prices of all altcoins typically react to Bitcoin’s price changes. Hence, when the prices of Bitcoin fall, the prices of other coins generally follow suit. This may have been behind the slight dip in BNB’s prices.
On the whole, BNB successfully dodged the disastrous drop in its market value despite the Financial Conduct Authority’s crackdown.
