UK bans World’s Largest Crypto Exchange

Britain’s financial regulator, Financial Conduct Authority (FCA), has banned world’s largest cryptocurrency exchanges, Binance.

Key Points

Binance cannot conduct any regulated activity as it will come under growing scrutiny globally.

What is the issue?

Binance Markets was acquired by Binance company in 2020. It was not using regulatory permissions. However, FCA’s move will not affect services offered on its website called Binance.com.

Background

Binance had announced in June 2021 that it bought an FCA-regulated entity and it will offer cryptocurrency trading services using pounds and euros.

Implications of FCA’s move

FCA’s move will extends a regulatory crackdown on cryptocurrency sector because of rising concerns about its involvement in money laundering and fraud.

Do Britain regulate cryptocurrencies?

Trading of cryptocurrencies is not directly regulated in Britain. Services like trading in cryptocurrency derivatives does require authorization.

What is Binance?

Binance is a cryptocurrency exchange from Cayman Islands. It provides a platform to trade several cryptocurrencies. It was founded in 2017. Binance is the largest cryptocurrency exchange worldwide in terms of trading volume, as of April 2021. This cryptocurrency exchange was founded by Changpeng Zhao. It was initially based in China. But due to increased regulation of cryptocurrency in China, it moved headquarters out of China.

Financial Conduct Authority (FCA)

FCA is a financial regulatory body in United Kingdom. It operates independently of UK Government. It is financed by charging fees to members of financial services industry. Its function is to regulate financial firms providing services to consumers. It works alongside Prudential Regulation Authority and Financial Policy Committee.

Month: Current Affairs - June, 2021