It appears that the UK regulator is incapable of supervising Binance. This was announced by the FCA on Wednesday and a corresponding supervisory notice was published. The reason for this would be the complex and risky financial products that posed a risk to investors. At the same time, the FCA asked Binance to stop the authorized activities of 2018.
The world’s largest exchange cannot be controlled
Earlier on Wednesday, the UK Financial Conduct Authority (FCA) issued a supervisory notice announcing that Binance, the world’s largest crypto exchange, cannot be effectively supervised. As such, users would be exposed to financial risk. The UK regulator’s notice is originally dated June 25, although the FCA has only just published it. It states:
‘Based on the Firm’s engagement to date, the FCA considers that the Firm cannot be supervised effectively.
Binance must cease activities
At the same time as the publication, a notice also went out to Binance Markets Limited, in which the FCA asked the world’s largest crypto exchange to cease activities. This involves activities such as advisory services as well as the protection as well as trading of crypto investments. The FCA approved these activities in April 2018 and now withdrew that approval. The UK regulator also asked Binance to leave a message on its website and all other communication channels as well as social media.
In doing so, Binance must now post the message “Binance Markets Limited is not allowed to carry out regulated activities in the UK.” At the same time, the crypto exchange is not allowed to post any live advertisements or promotions in the UK. Moreover, Binance must send a written confirmation that the world’s largest exchange is following the steps to comply with the requirement.
Here’s why FCA can’t control Binance
The UK regulator has shared three reasons why they cannot effectively control the crypto exchange. One is about the failure to carry out regulated activities. The other is the failure to meet effective regulatory threshold conditions. However, the failure tolen of adequate protection for consumers led to FCA’s inability to police Binance.
Further, the crypto exchange allegedly failed to publish a final draft of its business plan and strategy, showing what anti-money laundering and terrorist financing measures are planned. The company commented on this as follows:
We are committed to working with regulators and policymakers to develop policies that protect consumers, foster innovation, and advance our industry.
The world’s largest crypto exchange is currently facing problems all over the world and all governments and regulators are warning about the crypto exchange. Nevertheless, the exchange has responded by imposing stricter KYC requirements. Binance users have also been able to choose lower leverage options for quite some time. Furthermore, Binance has increased its compliance team by 500%. Despite these new measures, however, the exchange is still facing resistance. Especially in Germany, Malaysia and also South Korea.
Deciding on the right provider is not always easy. That’s why we recommend you take a look at our bitcoin broker & exchange comparison. Trade on the safest and best exchanges worldwide! To the comparison