Binance Facеs Limitations for UK Trading
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The Binance International Exchange may be facing troubles for the UK market, as regulators claim crypto trades are offered to local clients without the requisite permission. Accessing Binance from the UK has been one of the staples of crypto space, but the new conditions post-Brexit may limit traders.
The UK Financial Conduct Authority announced no entity related to the Binance Group holds authorization to offer cryptocurrency trading 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,” announced the regulator.
At the moment, UK traders still have access to services through Binance.com, the gateway to the international exchange’s markets.
Binance Refutes the Total Ban Narrative
The Binance International exchange immediately refuted the accusation it was operating in the UK without a license. The UK-based exchange operator, Binance Markets Limited (BML) is a separate legal entity, and does not offer trades on the Binance International Market. BML was acquired by Binance Group in 2020 and was still in the preliminary stage of offering localized cryptocurrency services.
However, the Binance community is still raising doubts on the current status of UK-based access to Binance markets. There are still active accounts on the exchange, and banks are still carrying transfers to the exchange.
The FCA also does not regulate cryptocurrency trading directly. However, derivative products need to be registered, potentially limiting BML to offer BTC futures or other derivatives. Binance will need to warn its users about its lack of regulation, though it is unlikely the exchange will curb its offerings to UK-based persons.
However, UK-based traders may abandon the exchange and look for alternatives. Others resort to using VPN and access Binance’s services as an offshore exchange. For now, there is no information of suspended UK-based accounts. Binance may continue offering its services, including derivative trading, if it has a pending application for a license. Buying cryptocurrency with GBP, however, is not technologically limited in any way, or banned for persons residing in the UK.
European regulations are strict, but still allow the building of some of the most liquid cryptocurrency exchanges and brokerages. The regulator’s focus is mostly on compliance with anti-money-laundering and KYC procedures, which are already in place for most exchanges.
FCA Warns of Highly Risky Assets
The FCA statement came with a general warning on Binance offerings of potential high-yield investments. Binance hosts multiple token-based projects, which offer various forms of passive income. While the exchange vets most of the coins listed, it has also carried risky coins and tokens.
Binance Smart Chain offers completely unregulated access to tokens, as well as decentralized trading. Using Binance’s Trust Wallet, most users can gain access to airdrops, as well as possibilities to move stablecoins and use PancakeSwap. So far, the FCA has no way of monitoring or regulating those markets.
What Binance Means for Crypto Traders
Binance has limited its services to several regions, especially the US and Canada. Initially, Binance operated out of its Tokyo offices, but was ousted by the Japanese Financial Services Agency. One of the reasons for the limits of UK offerings is that some tokens are problematic and may be considered unregistered securities by the US Securities and Exchange Commission.
Since March 2018, Binance International operates out of Malta, making use of both the regional and EU-wide cryptocurrency regulations.
Binance International offers some of the most liquid pairs and access to assets with high potential for gains. Other exchanges may limit their cryptocurrency offerings to comply with specific country regulations.
Binance is still operational in EU countries, offering to buy BTC with EUR and other fiat currencies. Transfers are still open for SEPA, though UK traders have paid a higher fee since the finalization of Brexit.
Binance Remains Most Important Crypto Trading Hub
Binance remains one of the most liquid hubs for cryptocurrency trading. The exchange is one of the biggest holders of Tether (USDT), and also boosts liquidity through its native dollar-pegged coin, Binance USD (BUSD). The exchange’s BTC wallet is also the biggest on record, containing 299,427 BTC as of June 26, 2021.
Trading volumes on Binance exceed $72B, up from lows of $1B during the lows of the bear market. Binance offers spot trading, as well as leveraged futures trading for BTC and some of its most liquid assets.
The most active assets on Binance as of June 2021 are Bitcoin and Ethereum, but Dogecoin (DOGE) is also near the top in term of daily volumes.
Despite the news of unwanted regulatory attention, Binance Coin (BNB) attempts to regain its positions. The asset appreciated by more than 4% overnight to $294.75. The asset rose after the rapid market recovery on Monday. BNB followed the lead of Bitcoin (BTC), which recovered its positions above $35,000.
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