Binance, headed by Changpeng Zhao, offers a wide array of financial services to users in global markets. Its own, Binance Coin, is known to be the world's fourth-largest cryptocurrency. Its trading volumes were as high as $662 billion in June 2021, a ten time jump from July 2020, as per Crypto Care. However, in the past months, Binance has experienced intense scrutiny from regulators across the globe.
In April, Germany's watchdog, BaFin, announced that the company was at risk of being fined for handing out stock tokens. Back in May, the group also went into an investigation lead by the US Justice Department and the Internal Revenue Service. According to Bloomberg, Binance Holdings, an entity of Binance Group is under scrutiny by officials dealing with money laundering and tax-related offenses ever since.
In the eyes of Japan's Financial Services Agency, the company seemed to be operating illegally in the country, resulting in scrutiny. Furthermore, Thailand's regulatory system also filed a complaint against Binance. The reason behind which remains functioning in a digital asset trading business minus a license, otherwise prohibited in the country. This complaint by the Thailand SEC is also the start of a criminal investigation against the company.
In the past few weeks, another country that has scrutinized Binance is the United Kingdom. The Financial Conduct Authority (FCA) has confirmed that Binance can no longer conduct any regulated activity in the UK. While the FCA does not regulate cryptocurrencies, exchanges are required to register themselves with the FCA after cases of illicit money laundering and tax offenses in cryptocurrency exchanges. Since the Binance group failed to do so, they can no longer facilitate any financial exchanges in the UK. In order to continue their activities, Binance would need written consent from the FCA. Subsequently, a warning was also issued to consumers to beware of facilities offered by Binance Markets and the group in general.
Binance cryptocurrency is not based out of the UK currently. Hence, the group informed its users that these regulations will have no impact on services provided on their online platform. And despite the ban's enforcement, British citizens will continue to have access to the services offered by the company in other jurisdictions, making them eligible to purchase and sell cryptocurrency.
FCA's decision came after the group went under scrutiny by many other regulators across the globe. They also emphasized the dangers of investing in cryptocurrencies overall.
Written by: Akshita Sehgal