• Following a Binance UK ban, the nation stopped all activities of the exchange.
• British investors can still access the exchange platform in other jurisdictions.
The largest cryptocurrency exchange has been banned from operating in the UK. It has until Wednesday to close its operations in that country. The Binance Company, which allows its clients to trade cryptocurrencies worldwide, was asked to stop any activity in the UK under its subsidiary Binace Markets Limited.
The move was taken by the Financial Conduct Authority and represented another blow to the cryptocurrency industry. Some regulators are very concerned about the potential role of digital currencies in criminal or illegal activities.
Binance UK ban is a blow to the crypto world
Financial conduct authority warns the little investor protection as crypto-assets become more popular. Due to this prohibition, the company in the UK may not conduct activities without the consent of the Financial Conduct Authority (FCA).
The FCA does not regulate virtual currencies. It only regulates the financial products linked to them. AJ Bell financial analyst Laith Khalaf said that the Binance platform offers derivatives products with up to 4x leverage on a range of highly volatile virtual currencies. This means that both profits and losses are multiplied by 4.
To this analyst, these risky products have attracted regulatory authorities. Since January, the FCA has introduced a ban on exchange-traded and derivatives sales. FCA is tracking digital currencies such as Ethereum and Bitcoin to retail investors after concluding that they are at enormous risk of losing their money unexpectedly and suddenly.
Crypto service companies must compliance with FCA rules
The FCA has also said that all companies that offer the service with cryptocurrencies must register and demonstrate that they comply with the rules against the illicit activity such as money laundering.
The exchange platform Binance had applied to become a registered company with the FCA, but it abandoned that application last month. This measure means they cannot operate as an exchange company in the UK.
The FCA said earlier this month that only five companies had registered, but most still did not meet the requirements.
Despite this ban, British investors on such an exchange platform can still access the company’s services in other jurisdictions. This company that offers encryption services worldwide said that the FCA notice has not directly affected the services provided on BInance.com.
This exchange company was also banned on Friday by Japan’s financial watchdog. This agency said that the company was not registered to do crypto activity in that country.