On 26 June 2021, the Financial Conduct Authority (“FCA”), ruled that Binance, a leading crypto exchange, cannot conduct any “regulated activity” in the UK. It is understood that Binance was aiming to launch its digital market place in the UK but it withdrew its application with the FCA in mid-May 2021 after failing to comply with the FCA’s anti-money laundering requirements.
The move by the FCA comes amidst efforts from the watch dog to require crypto asset companies to register with the FCA.
Under the ruling, the FCA declared that Binance’s UK subsidiary, Binance Markets Limited, cannot undertake any regulated activities without the prior written consent of the FCA. Whilst Binance has indicated that the ban won’t have a “direct impact” on the services it currently provides from its website Binance.com (in part due to its base in the Cayman Islands), it will have to display a warning on its website from 30 June 2021 outlining that it does not have permission to operate in the UK. This notice has been posted on its ‘.co.uk’ website and on its UK Twitter account.
There were reports this week of short-lived “maintenance” issues so that it was not possible to deposit or withdraw sterling from the Binance platform. There was speculation that it might have been connected to the FCA ruling, however, the maintenance issue appears to have been resolved swiftly.
Separately, it has been reported this week that 64 of the companies which applied for temporary registration with the FCA have withdrawn their applications. To date, only 6 companies have had their applications approved.
Rosenblatt can help
We have a wealth of experience across diverse sectors and closely collaborate with institutions, large and small companies (both public and private), start-ups, scale-ups and individual entrepreneurs.
The regulatory regime which applies to cryptoassets is increasing in complexity. Rosenblatt advises on all aspects of cryptoassets and regulatory law. In particular we can assist in helping crypto businesses obtain the correct authorisations and registrations from the FCA necessary for compliant operation of all forms of crypto investment activity.
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If you also want to take advantage of the early registration process, please contact the authors listed below.
