- Binance has not been banned in the UK, despite the headlines over the weekend
- The Financial Conduct Authority told Binance it cannot launch Binance UK as its is not regulated to do so
- The regular Binance platform will likely be unaffected for UK users
Binance is being banned in the UK! At least this is what you’d think if you read mainstream media outlets and half of Twitter on Saturday. The truth is very different than that, but we wouldn’t expect the anti-Bitcoin media to pass up a chance to put ‘cryptocurrency’ and ‘ban’ in a headline. The reason for the scare tactics was due to the wording of a notice by the Financial Conduct Authority (FCA) over the weekend which made it seem like Binance had two days to get its affairs in order before being booted out of Britain. In fact, the order related to Binance Markets Limited, a subsidiary linked to Binance UK, the British wing of Binance which hasn’t yet launched, making the whole thing nothing more than a storm in a good old British teacup.
FCA Stops Binance UK Launch
The scare came on Saturday when the FCA posted a notice on their website stating that “Binance Markets Limited is not permitted to undertake any regulated activity in the UK”, giving Binance until June 30 to withdraw any advertising around derivatives products and display a disclaimer saying that they are not authorized to offer such services. This caused panic in the streets of Twitter and the doom and gloom headlines, but behind all this was a fundamental misunderstanding.
The FCA banned British companies from offering cryptocurrency derivatives in October 2020, a ban which came into force in January this year. However, given that Binance is operated from a different country (although no one, even CZ, seems to know where), British users can still trade futures market on the platform. The entity that has been banned, Binance Markets Limited, was acquired by Binance in May with the intention of switching UK users to it through their Binance UK division and has yet to begin operating.
Business As Usual for UK Users
Binance announced the imminent launch of Binance UK last year having acquired “an FCA-Regulated Entity” in Binance Markets Limited. However, it seems that Binance may have jumped the gun as the FCA stated in the note that it had been in negotiations with Binance over regulating Binance Markets Limited but that the negotiations fell down. This led the FCA to worry that Binance UK would launch without a regulated derivatives product…and here we are.
As Binance themselves said on Twitter, the FCA note doesn’t affect anything on the regular Binance platform, although the extra scrutiny on Binance may lead them to pull futures options for UK users to avoid any further entanglements with the FCA:
We are aware of recent reports about an FCA UK notice in relation to Binance Markets Limited (BML).
BML is a separate legal entity and does not offer any products or services via the https://t.co/QILSkzx7ac website. (1/4)
— Binance (@binance) June 27, 2021
What this all means for British Binance users is pretty much nothing, but what it means for the Binance UK is another matter entirely, and it wouldn’t be unexpected for CZ to can Binance UK entirely.