Market regulators have banned Binance Markets Limited from all regulated activities in the United Kingdom, and volatility increases across the crypto market.
Binance Under UK Scanner for Multi-Offences
Binance is the world’s largest crypto exchange in terms of its trading volume. But, regulators have the top crypto exchange under their scanner. The cryptocurrency exchange withdrew its 5 MLD application in May 2021. Binance has come under scrutiny for money laundering offenses. However, it can offer crypto trading to investors on its website, Binance.com. The crypto exchange has not been allowed to function as it has not registered with the FCA.
The strict action taken by the FCA against Binance warns crypto users who buy and sell bitcoin and altcoins. There are many users in the crypto exchange, and the FCA is worried about the high volatility in the crypto market. Even a tweet from famous personalities like Elon Musk sets large swings in crypto tokens like Bitcoin and Dogecoin. It will disrupt the confidence of those investing in cryptocurrency, says FCA.
Financial Regulators Across the Globe Step up Regulatory Scrutiny
Binance has come under scrutiny by regulators from the US, the UK, Germany, and other major currencies. The top cryptocurrency exchange has come under scrutiny by UK regulators. The regulations saw a drop in top cryptocurrency bitcoin prices below $35,000 to a key support area at $30,000. However, a bounce from key levels has brought relief to the crypto market.
UK’s Financial Conduct Authority has asked Binance to stop undertaking regulated activities in its cryptocurrency exchange. Binance has promised high returns to investors, providing false hopes that have made investors lose money. The cryptocurrency exchange provides cryptocurrencies without a proper investor prospectus in the United Kingdom.
BaFin is a German financial regulator that probes the activities of the crypto exchange Binance.
China has already clamped down on cryptocurrency operations in its country. Electric supply to the mining industries in China is banned. China mines almost 90% of cryptocurrency, and these mines look elsewhere to continue their mining activities.
Japan has warned Binance about operating without permission within its country.
The US Securities and Exchange Commission (SEC) has warned users about the activities of the crypto platform. It states that Binance Holding deals in money laundering. It has warned the exchange about tax offenses.
In Canada, the Ontario Securities Commission (OSC) accuses cryptocurrency trading platforms of not complying with its regulations.
In South Korea, crypto exchanges have to comply with the regulation by September 2021. The government is trying to restrict anonymous accounts to prevent unlawful activities like money laundering in the crypto tokens.
There are many crypto users trading on the crypto exchange. Investors who are not directly affected by the FCA ruling say that they require more information about crypto exchange usage. The lockdown has brought in many crypto users, especially the millennials who prefer investments in digital tokens for higher profits. The high volatility provides big profits, not available in other sectors, they say. Gold investors are worried about the falling gold prices and are shifting their investment into cryptocurrency markets.
Binance the Top Cryptocurrency Exchange
Binance, the Cayman Island-based crypto exchange, offers various services to crypto users. It performs many services to crypto investors, such as providing digital wallets and trading futures, and allows the purchase and sales of digital currencies. However, the FCA states that the Binance Group does not have the required license or authorization to conduct crypto activities on its exchange in the United Kingdom. It is not the first time that Binance has come under regulatory scrutiny. It encourages investing in cryptocurrency using local currencies. The easy access to the digital tokens is bringing in new users into the exchange, especially young investors looking for big profits.
Investment scams and fraudulent activities are some defects that are under the FCA scanner on the Binance platform. Cryptocurrency prices have moved lower on the strict regulations enforced.
Binance spokesperson says, “We will work with a collaborative approach with our regulators”. The FCA is not against offering cryptocurrencies but is against offering derivatives. Despite strict regulations, many users continue to purchase and sell cryptocurrencies on its website.
Crypto trading will continue as usual, and the FCA regulations on the Binance crypto exchange will not hurt day-to-day trading, say experts. The need for more crypto regulations will help the sector grow, say experts. The FCA intervention will provide better regulatory restrictions in the cryptocurrency market. It will help those who buy cryptocurrency in the future.
Bitcoin, the world’s top cryptocurrency, trades below $35,000 this week. The bearish move shows signs of continuing. Though such crypto news is bearish for the crypto prices, it has not affected the crypto prices much.
The cryptocurrency market cap rose to $1.4 trillion on Monday, according to sources. The cryptocurrency prices of Bitcoin are trading at $33750. The regulatory offenses brought top cryptocurrency prices lower, but prices recovered on Thursday. Bitcoin prices were at $33,500, and ethereum prices were at $2,114 on Thursday, June 1. Litecoin prices had also recovered to $136.