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The UK’s regulators have been among those who have criticized Binance, the world’s largest crypto exchange by trading volume, a lot recently. The Financial Conduct Authority (FCA) is by no means the only regulator who has done so in the last few months, but it has been one of the harshest critics.
Now, since the criticism of the exchange went global, Binance did take steps to improve. It removed the assets it didn’t have the license for, and it started hiring new members for its compliance team, which it said will be doubled by the end of the year.
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However, the FCA is still not satisfied, and it recently stated that the firm is not capable of being effectively supervised, which makes it a major risk. The regulator’s greatest concern appears to be the exchange’s global reach, as well as the range of products that it offers. Many of them are very complex, and high-risk financial products that put consumers at risk.
The new conflict is just a continuation of the earlier one
Earlier this year, in June, the regulator prohibited Binance from conducting regulated activities in the UK, imposing, along the way, several requirements on the platform. When Binance finally responded, it said that Binance Markets Limited — its subsidiary that the regulator had the biggest problem with — is a standalone company and that it is not the entity that is offering crypto derivatives in the country.
However, due to the fact that Binance Group firms are global, and beyond the regulator’s reach, the FCA rules do not apply to them. At least, not at the full spectrum of them.
The exchange’s spokesperson insisted that BML is in full compliance with the FCA’s rules and that it will continue to engage with the regulator to solve any potential issues. The matter is extremely complicated, but the regulator wasn’t satisfied with this response, and it demanded more from the exchange. In fact, it took Binance’s response as a refusal to provide the requested information.
For now, the situation still remains unresolved, which the regulator’s new statement further confirms, and it makes Binance’s future in the country highly uncertain.