Binance — the world’s top crypto exchange by daily volume — is facing ire of finance watchdogs in the United Kingdom, Ontario, and Japan.
The UK’s Financial Services Agency (FSA) has outright banned Binance affiliate Binance Markets Limited from offering regulated services in the country.
Binance holds no registration, license, or authorization to offer regulated services (like derivatives trade) in the UK, said the FSA. As it stands, crypto trade isn’t directly regulated in the UK.
In any case, Binance must reportedly post a notice to its local site by Wednesday that reads: “Binance Markets Limited is not permitted to undertake any regulated activity in the UK.”
Binance must also warn prospective UK users of the volatility of crypto markets, as well as retain records of any local customers that’ve used the platform.
According to a statement shared by CNN, Binance has been squirrelly about the impact of the FCA blackballing.
“[Binance Markets Limited] is a separate legal entity and does not offer any products or services via the Binance.com website,” said the company, referring to its main Binance.com domain that largely services users outside of the United States.
“The FCA UK notice has no direct impact on the services provided on Binance.com. Our relationship with our users has not changed.”
Meanwhile, Ontario threatened Binance with a securities trading ban (as well as a raft of fines) last Friday. In response, the Cayman Islands-based platform will leave the province altogether as of December 31 this year.
Simultaneously — and on the other side of the world — Japan’s financial regulator warned Binance it isn’t registered to offer services in the country at all.
The statement was Japan’s second such warning in three years.
Not just Binance
Bybit — another global crypto trading firm — also caught flack from the Ontario Securities Commission (OSC) last week.
The OSC accused the crypto derivatives exchange (domiciled in the British Virgin Islands but operating out of Singapore) of failing local securities laws.
Despite offering crypto trading to Ontario residents, “Bybit has never been registered with the Commission to engage in the business of trading or obtained an exemption from the registration requirement,” said the OSC in a statement.
Ontario’s exchange watchdog made similar moves against the operators of exchanges Poloniex and KuCoin.
This makes Bybit and Binance the third and fourth crypto platforms hit by Ontario regulators since late May.
Like the others, the OSC demanded Bybit:
- Cease offering trade for crypto securities in Ontario.
- Pay a penalty up to CAD$1 million ($811,000).
- Cover the costs of the OSC’s investigation.
The situation looks grim for exchanges. However, securities lawyer Matthew Burgoyne told The Star the OSC’s crypto crackdown is more about protecting local investors than policing platforms.
“If someone in Canada is looking at putting money into cryptocurrencies, maybe they’ll think twice about doing it through one of these exchanges,” said Burgoyne (our emphasis).
“That’s something that the OSC is probably hoping will happen as part of this.”
For what it’s worth, Bybit reiterated its commitment to legal compliance to Bloomberg and noted it was discussing the issue with Ontario regulators.