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How legal is world’s largest cryptocurrency exchange Binance in the UK?

Image credits: Primakov/Shutterstock

According to the latest reports, Binance, the world’s biggest cryptocurrency exchange, has been banned in the UK now. In a notice, Financial Conduct Authority (FCA) said, “Binance Markets Limited is not permitted to undertake any regulated activity in the UK.” 

As a result, Binance is not currently permitted to undertake any regulated activities without the prior written consent of the FCA

It also advised people to be wary of advertisements online and on social media promising high returns on investments in cryptoasset or cryptoasset-related products.

FCA’s move comes as regulators globally are scrutinising the crypto-sector due to the potential for use in money laundering and other illegal activities. 

Is it legal to buy and sell cryptocurrencies on Binance in the UK?

It’s worth mentioning that Binance’s existing crypto-exchange is not based out of the UK. Meaning, there won’t be any impact on the UK residents who use the website to purchase and sell cryptocurrencies. 

Since Binance is not registered with the FCA, hence it is not allowed to operate an exchange in the UK. “No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct a regulated activity in the UK,” says FCA. 

Besides setting up an exchange in the UK, FCA also ordered Binance to stop any form of advertising by June 30. 

Not the first time 

This is not the first time Binance has come under scrutiny. The cryptocurrency exchange platform has faced several issues from various countries including, the US, Canada, Japan, and Germany. 

According to Bloomberg, Binance Holdings has been probed by the US Securities and Exchange Commission (SEC) for money laundering and tax offences. 

Last week, the world’s largest cryptocurrency exchange pulled out of Ontario, Canada, after the Ontario Securities Commission (OSC) was accused of failing to comply with provincial regulations. 

On top of that, Japan’s Financial Services Agency (FSA) warned Binance for its operation in the country without permission. 

What is Binance?

Founded by Canadian-Chinese developer Changpeng Zhao, Binance is a cryptocurrency exchange platform that combines digital technology and finance. Based out of the Cayman Islands, Binance witnesses more than 1.4 million transactions per second. 

It offers other products including, Binance Exchange, Binance Academy, Binance Card, Binance Labs, Binance Charity Fund, Binance Launchpad, Binance Research, Trust Wallet, and NFT.

Needs to be decentralised 

In an interview with BBC, Mr Saponaro, who co-founded the crypto-currency Divi and the blockchain payments ecosystem Divi Project, says, 

“The real problem with cryptocurrency exchanges is that they are still centralised, in that there is still a central authority that takes custody of the users’ money, almost like a bank.”

This is just opposite to what Blockchain and Cryptocurrency technologies were designed to do. Saponaro also adds that all exchanges need to be decentralised, allowing users to have complete control over the cryptocurrency. 

“We’re 12 years into the crypto adoption cycle, these things just take time – the exact same things were said about the internet initially,” he said.

“Governments of each jurisdiction, especially the G7, need to with full transparency and confidence give us the full regulations about what we can and cannot do, and it needs to fit what the technology actually does.”

What do you guys think about the Binance ban? Do let us know your opinion in the comments section below.