The Financial Conduct Authority (FCA) has barred the world's largest cryptocurrency exchange platform, Binance, from operating in the UK,
The financial regulator has declared that Binance Markets Limited isn’t permitted to undertake any regulated activity in the UK, with the exchange platform unable to partake in any activities “without prior written consent of the FCA”.
The FCA also issued a warning to consumers against adverts online and on social media that promise high returns on investments in cryptoasset or cryptocurrency-related products.
Since most companies engaging in these products aren’t authorised by the FCA, consumers don’t have access to the financial services compensation scheme, and cannot rely on help and guidance from the financial ombudsman service.
“While we don’t regulate cryptoassets like Bitcoin or Ether, we do regulate certain cryptoasset derivatives (such as futures contracts, contracts for difference and options), as well as those cryptoassets we would consider ‘securities’,” the FCA said. “A firm must be authorised by us to advertise or sell these products in the UK.”
The proposals come as regulators around the world begin taking action against cryptocurrencies and crypto-related products. China, for example, has signalled a crackdown on Bitcoin and cryptocurrency mining, alongside Turkey, which is also banning cryptocurrencies. El Salvador, by contrast, has become the first nation to adopt Bitcoin as legal tender.
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The FCA previously banned cryptocurrency-linked financial products in October 2020 following a regulatory review. Due to the scope of market abuse and volatility of price movements, the regulator deemed such products to be ill-suited for retail consumers due to the potential harm they may pose.
The Binance ban, and consumer warnings, has been issued only a few days after the platform received a letter of commendation from the UK’s South East Regional Organised Crime Unit for its role in taking down drugs suppliers on the dark web.
Binance had taken part in an international investigation with several law enforcement agencies across the world to take down the FANCYCAT ransomware group, which was laundering money from ransomware attacks as well as other illegal activities.
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Keumars Afifi-Sabet is a writer and editor that specialises in public sector, cyber security, and cloud computing. He first joined ITPro as a staff writer in April 2018 and eventually became its Features Editor. Although a regular contributor to other tech sites in the past, these days you will find Keumars on LiveScience, where he runs its Technology section.