Binance, the troubled cryptocurrency exchange, has withdrawn from key regions in response to mounting regulatory pressure. The UK-based subsidiary, Binance Markets Limited (BML), recently terminated its registration with the Financial Conduct Authority (FCA). This prompted the FCA to clarify that no Binance company can provide services in the UK.
The FCA fulfilled Binance’s request to revoke BML’s authorization on May 30, 2023, and confirmed in a June 7 update that the regulatory authority no longer authorizes the firm.
However, according to Binance’s sub-regional manager for growth in the UK and Europe, Ilir Laro, the termination of BML’s registration has had no impact on Binance’s operations since the exchange was never active in the country.
Binance Group acquired BML in 2020 to establish a legally compliant operation in the United Kingdom. Unfortunately, their efforts proved unsuccessful, and the subsidiary has remained inactive ever since its purchase, as confirmed by Laro. While the termination of BML’s registration may not have an immediate effect, it underscores the challenges faced by Binance in complying with regulatory requirements.
Despite the setback, Binance remains operational through five European-regulated organizations based in France, Italy, Spain, Poland, and Sweden. Laro emphasized on Twitter that Binance is now focusing on preparing for implementing the Markets in Crypto Assets (MiCA) regulations, which are set to come into force in 2024 or 2025. In light of this, the company is streamlining its operations to facilitate passporting throughout Europe.
The move by Binance reflects the increasing scrutiny and tighter regulations faced by cryptocurrency exchanges worldwide. Governments and regulatory bodies are keen to ensure investor protection and mitigate cryptocurrency risks. Binance’s decision to exit certain regions highlights industry players’ challenges in navigating evolving regulatory landscapes while striving for compliance and operational efficiency.
As Binance adjusts its operations to meet regulatory demands, the cryptocurrency industry as a whole is witnessing significant transformations. With new regulations on the horizon, exchanges and market participants must adapt and establish robust compliance frameworks to maintain their presence and address regulators’ concerns worldwide.