The World's Largest Crypto Exchange Was Banned in the UK, Now What?
The world's largest cryptocurrency exchange, Binance, was banned by the UK's market regulator, the Financial Conduct Authority (FCA), in the latest of several setbacks for digital currencies this year, a report from CNBC explains.
Cryptocurrency has had a rollercoaster year so far with a huge boost from Tesla's $1.5 billion investment in February followed by sharp price drops due to China's crypto bank ban and Tesla's u-turn on BTC payments.
Now, the FCA's new ruling bans Binance from conducting regulated activity in the United Kingdom, and the company has until June 30 to respond to the FCA's demands and confirm that it will comply.
Though the UK watchdog has not stated exactly why it banned the cryptocurrency exchange, a statement on Saturday, June 26, read that "due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA."
Cracking down on crypto
The FCA isn't the only regulator to crack down on cryptocurrencies, and even on Binance, in recent times. China recently ordered cryptocurrency miners to cease operations in several regions and has also prohibited banks from offering services related to cryptocurrencies.
Last week, Japan's market regulator, the Financial Services Agency (FSA), issued a warning to users, stating that Binance is not registered to do business in the country.
As for how much the FCA ruling will affect current users of Binance, the company will have to feature a prominent message on its UK website stating that "Binance Markets Limited is not permitted to undertake any regulated activity in the UK."
How Binance took the news
A spokesperson from the company told CNBC that "the FCA UK notice has no direct impact on the services provided on Binance.com . . . Our relationship with our users has not changed."
The firm also said it takes a "collaborative approach in working with regulators and we take our compliance obligations very seriously."
All of this means that cryptocurrencies have had an up and down year, ironically mimicking the "to the moon" meme started by retail investors on Reddit. Bitcoin, for example, hit an all-time high market cap of $64,000 in April, followed by a dive that saw it halve in value the following month to $32,000.