The UK Financial Conduct Authority (FCA) said that the Bitcoin exchange Binance poses a significant risk to consumers and cannot be effectively supervised by the regulator.
On 25 August 2021 the FCA published a supervisory notice. In the document dated 25 June 2021, the agency disclosed the reasons for the ban decision against Binance’s UK subsidiary from engaging in any regulated activity in the country.
The FCA cited concerns about Binance’s global reach and its range of products.
The regulator noted that it had sent the company two requests, and the responses received could be characterised as withholding information.
Binance declined to disclose its global business model, the legal entity behind the binance.com domain, clarify the regulatory status of traded tokenised equities, and did not provide the information requested about other products.
“Based on interactions with the firm to date, the FCA believes that it cannot be effectively supervised. This raises particular concerns given the firm’s membership in a global group that offers complex and high-risk financial products that pose a significant risk to consumers,”
The regulator noted that Binance’s UK subsidiary has not engaged in regulated activity for 12 months and, evidently, is not capable of doing so going forward.
A spokesman for the exchange told Reuters that Binance Markets Limited has satisfied all FCA requirements and continues to engage with the regulator.
“As the cryptocurrency ecosystem continues to grow and evolve, we strive to work with regulators and policymakers to develop policies that protect consumers, encourage innovation and move our industry forward,” he said.
In August, Binance introduced mandatory verification for users.
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