UK financial regulator orders Binance to cease regulated activities in the country

Binance, one of the world’s largest cryptocurrency exchanges, has been ordered to cease all regulated activities in the United Kingdom following a review of its operations by the Financial Conduct Authority (FCA).

“Binance Markets Limited is not permitted to carry out any regulated activities in the United Kingdom,” the FCA said in an announcement, adding that no other entity in the Binance Group holds any licenses required to operate in the UK.

“Most companies that advertise and sell crypto asset investments are not authorised by the FCA. This means that if you invest in certain crypto assets, you will not be able to use the Financial Ombudsman Service or the Financial Services Compensation Scheme if something goes wrong.”

The FCA said Binance had until Wednesday evening to confirm that all advertisements and promotions had been removed, and must also state on its website, social media and other media platforms that it no longer had a license to operate in the UK.

While the FCA does not regulate cryptocurrencies such as Bitcoin or Ethereum, it is authorized to manage derivatives trading, which includes futures contracts and options. Digital assets that are considered securities also fall under the FCA’s jurisdiction.

On Sunday, Binance clarified its corporate structure in response to the FCA. Binance Markets Ltd is “a separate legal entity that does not offer any products or services through the Binance.com website,” the exchange wrote on Twitter, adding:

“FCA UK’s notice has no direct impact on the services provided on Binance.com.”

The FCA’s decision comes just one day after Binance announced it would exit another major market: Users in Ontario, Canada, a province of 15 million people, must close all active positions by the end of the year.

Binance notified its users that Ontario has become a “restricted jurisdiction” without specifying why. However, the Ontario Securities Commission (OSC) may have played a major role in the decision due to its sweeping crackdown on cryptocurrency exchanges.

Regulators have taken another step towards tightening oversight of the cryptocurrency industry, with Binance being investigated by multiple agencies in the U.S. The Japanese Financial Services Agency also recently issued a warning to the exchange for providing cryptocurrency services without registration.