In a letter to the UK arm of Binance, the FCA said the firm posed a significant risk to consumers
The City watchdog has effectively blacklisted the world’s largest cryptocurrency exchange by declaring that it is ‘not capable’ of supervision by regulators.
In a letter to the UK arm of Binance, the Financial Conduct Authority (FCA) said the firm posed ‘a significant risk to consumers’. It added the firm was unwilling to engage with it.
But the regulator is unable to stop Britons using Binance.com as the website is not connected to its UK entity.
Consumers wanting to purchase bitcoin often use an exchange like Binance, which matches buyers with sellers.
According to its website, £1.5billion worth of cryptocurrencies are traded on Binance every day.
But the FCA and the Bank of England (BoE) are increasingly concerned about the risks posed to customers by its governance and products.
Binance also allows traders to place highly leveraged bets on cryptocurrencies, meaning customers can suffer heavy losses if punts go wrong.
The FCA is also understood to be concerned about Binance’s money-laundering and fraud controls.
It issued a rebuke to Binance in June, forcing it to display warnings on its website telling consumers that it ‘is not permitted to undertake any regulated activity in the UK’.
The regulator said Binance Markets Limited, the group’s UK arm, ‘refused’ to respond to basic questions including enquiries relating to money laundering.
In its letter to Binance Markets, the FCA said: The FCA considers that firm’s responses have been incomplete and have included direct refusals to provide information.
The FCA listed failures to provide details about how the group is organised, to explain what routes UK consumers could use to buy its products, and to identify the legal entity behind it.
Binance said: As noted by the FCA, Binance Markets has fully complied with all aspects of its requirements. We continue to engage with the FCA to resolve any outstanding issues.
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