Japan and the UK Bar Binance From Doing Business Within Their Borders
The world’s biggest crytpo exchange is feeling heat from financial regulators
The UK and Japan recently barred subsidiaries of Binance Holdings Ltd. from doing business in their countries. Binance is known as the world’s largest cryptocurrency exchange by trade volume, making it a hotspot for crypto enthusiasts and investors.
The UK’s Financial Conduct Authority (FCA), the nation’s main financial regulator, informed citizens on Saturday June 26th 2021, that Binance cannot conduct financial operations within their borders. It also served a notice to Binance advising the corporation that Binance Markets Limited cannot pursue regulated activities in the UK without express written permission from the FCA.
One day earlier, on Friday June 25th, Japan’s Financial Services Agency (FSA) issued a similar notice to the crypto exchange.
How did Binance respond?
Binance offers trading of cryptocurrencies and derivatives linked to them, such as futures. Since its inception in 2017, Binance has grown into the crypto behemoth we know today. Perhaps that’s why the corporation did not seem overly concerned by the development, as it posted the following Twitter thread:
“We are aware of recent reports about an FCA UK notice in relation to Binance Markets Limited (BML). BML is a separate legal entity and does not offer any products or services via the Binance.com website. (1/4)
The Binance Group acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions. For questions related to BML, please contact [email protected] (2/4)
The FCA UK notice has no direct impact on the services provided on Binance.com. Our relationship with our users has not changed. (3/4)
We take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules and laws in this new space. (4/4)”
-Binance on Twitter
Whether Binance is correct in this assertion and whether they will be able to continue providing services to UK and Japan-based individuals is yet unknown.
What does this mean for the cryptoverse?
If you’re a cryptocurrency investor or enthusiast, you may be concerned about the ramifications for the market as a whole. These notices from Japan and the UK’s regulatory bodies come on the heels of China’s crypto mining crackdown, which caused a dramatic drop in the value of most cryptocurrencies.
As shown above, the market value of bitcoin plummeted following China’s anti-mining legislation. Some experts assert that other cryptocurrencies will always follow bitcoin in such significant moves. In this case, that belief held true. The crypto market crashed and has only begun to recover.
While some investors are bailing on cryptocurrencies because of this upheaval, others see it as an opportunity to double down. Only time will tell which decision is the wisest.