***We will aim to keep this article updated as and when information is made available***
Current app status @ 21/07/2021 – 23:45 GMT
- Withdrawals: SUSPENDED
- Purchasing with card: SOME BANKS BLOCKING ALL TRANSACTIONS
- Currently Barclays and Santander
- Depositing GBP: SUSPENDED
TL;DR – Are Binance banned? Well, yes and no. Binance.com was never technically allowed to conduct regulated activity in the UK to begin with. However, trading crypto isn’t a regulated activity so the FCA has no jurisdiction over it, so in that sense, buying crypto with Binance is perfectly fine and Binance can still offer crypto buying and selling to UK customers. However, Binance were setting up a regulated UK arm – Binance Markets Limited, which has had to halt roll out due to not meeting the FCA requirements as yet.
Bottom line – Binance still operates in UK offering unregulated services as it always did, though depositing GBP into a Binance wallet has been suspended for now (potentially because this could be seen as a regulated activity).
***UPDATE*** – Although Binance still allows purchasing of crypto directly, some UK banks have now blocked all transactions into Binance
***UPDATE*** – Withdrawals are currently suspended on the platform, meaning fiat currency for UK and European users cannot be transferred to their bank accounts. This is due to clear junction, who provide Binance with these payment gateways have decided to stop working with Binance. Binance are working on finding another partner to provide this service.
As always, the following is not financial advice, this particular article contains information that is accurate to the best of our knowledge at time of writing and in parts contains opinions. Read our disclaimer
What we know:
On the 26th of June, the FCA (the UK’s financial conduct authority) released the following statement:
“Binance Markets Limited is not permitted to undertake any regulated activity in the UK. This firm is part of a wider Group (Binance Group). Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK. The Binance Group appear to be offering UK customers a range of products and services via a website, Binance.com.”https://www.fca.org.uk/news/news-stories/consumer-warning-binance-markets-limited-and-binance-group
As a result, Binance have posted the following statement on their website:
“The Financial Conduct Authority in the United Kingdom has asked us to issue the following statement. In the interests of clarity, we are happy to do so.
Binance.com is a platform providing various products and services to global customers. Some of these products and services are regulated outside the UK, while others are not. Binance Markets Limited is a UK based company which has not yet carried on any business. BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITIES IN THE UK.
Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. (No other entity related to Binance.com, other than Binance Markets Limited, holds any form of UK authorisation, registration or license to conduct regulated activity in the UK). Such authorisation, registration or license is not required for unregulated activities.
As a result, the imposition of the FCA’s requirements does not change any arrangements with users that use the products and services provided through www.binance.com. Accordingly, as requested by the FCA, Binance Markets Limited will obtain the FCA’s prior consent before launching its business and carrying on any regulated activities.“–https://www.binance.com/en/support/faq/e328a8a1ed5a401298262738d6f49edf
So, what does this mean?
Well basically, this means that ‘Binance Markets Limited’ cannot conduct any regulated activity in the UK. Further, the FCA wanted to make it perfectly clear that no entity related to Binance.com currently holds no authorisation to conduct regulated activity in the UK.
OK, so lets unpack this:
What is the difference between binance.com and Binance Markets Limited?
Binance we’re in the process of setting up a UK arm of their business based in the UK to better serve UK customers called ‘Binance markets limited’. As part of the setting up of this business, Binance has applied to the FCA for the permits for this new company to be able to conduct regulated activity in the UK as well as unregulated. Unfortunately, this process has been halted so for now, Binance markets limited is not able to conduct REGULATED activity. Binance.com is the broader name for the global company Binance that already operates accross the world, offering unregulated services. The current app that can be accessed from the UK is Binance, not BML.
Ok, so they’re separate companies, but what is regulated and unregulated activity?
In the UK, the FCA has the power to regulate – regulated activity. However, the FCA has no power over unregulated activity. Binance were never allowed to conduct regulated activity in UK, so the features that are available in the Binance app to UK customers, such as buying and selling crypto, is allowed to continue as it is unregulated activity. The FCA has power of over regulated activity which includes offering futures, CFD’s and some types of equities along with offering banking services. IN all likelihood, the new UK version of Binance was looking to expand it’s offering to UK customers but has failed to obtain the permissions to do this at present.
So why did BML get banned from regulated activities?
For now at least, the exact reason for why BML gained a ban for conducting regulated activities is unknown, however we can speculate as to why. In 2020 the FCA began requiring crypto asset companies to register with them and demonstrate compliance with anti-money laundering requirements. An “unprecedented”, 90 per cent of would-be companies, including BML, have dropped their applications. For this reason, Binance has been banned from conducting regulated activity (of which it never had authorisation in the first place).
Why couldn’t Binance meet their requirements?
Again, the exact reason is unknown, however we can speculate as to why. In May, binance commented that it had withdrawn it’s application due to “intensive engagement from the FCA”. This doesn’t necessarily mean that the company is engaged in money laundering activity, it more likely means that the company has failed to reach an agreement with the FCA on how it can satisfy the criteria. Binance reported that it had been in discussions with the FCA for some time so our best bet was that Binance were not prepared to budge on some aspect – likely to be transparency of business and customer information – to meet the requirements.
So what’s next? Our thoughts
We don’t really know – however if you are a binance user, you can – atleast for now continue to use the platform to buy and sell crypto. More importantly, at time of writing, you can still withdraw your money should you need to and we will continue to update this article as the situation develops.
In terms of wider impact, Binance has been under recent scrutiny from a number of world governments including Japan and Canada. It’s no secret that crypto currency poses a threat to central bank’s and governments-the-world-over’s ability to control capital. Crypto is designed to be completely decentralised and has the ability to completely change how the world interacts with currency. Considering central banks are scrambling across the world to create their own central digital currencies, that they won’t be releasing control of currency without a fight, and sanctioning the biggest players in the industry, such as Binance send a message to the entire world that they don’t intend to let crypto providers and supporters do what they want. Note though, there is something to be said for regulation. An amount of regulation can be good to protect the public and offers a level of security and legitimacy to currencies – something that crypto currencies are going to need if they have any hope of becoming widely adopted.
For now, we will be keeping a close eye on how Binance deal with the situation and how they intend to break into the UK market going forward.
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