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Binance Markets Limited (BML), the United Kingdom-based subsidiary of cryptocurrency exchange Binance, has canceled its registration with the Financial Conduct Authority (FCA). The move comes as Binance faces increasing regulatory scrutiny and legal challenges in various jurisdictions.
FCA Revokes Authorization
The FCA confirmed that BML is no longer authorized to undertake any regulated activity in the UK following the cancellation of its permissions. The regulator stated:
“Binance Markets Limited has recently submitted a cancellation request of their FCA permissions which was completed on 30 May 2023 and is reflected on the FCA Register.”
The UK financial watchdog added:
“Following the completion of the cancellation of permissions the firm is no longer authorised by the FCA. No other entity in the Binance Group holds any form of UK authorization or registration to conduct regulated business in the UK.”
According to local reports, despite the cancellation, the Changpeng Zhao-led company expressed its intention to register with the FCA again in the future. The company clarified that the administrative process involving BML does not affect its plans for regulatory adherence in the UK.
Binance Faces Increasing Legal Troubles
Binance has been facing legal troubles, including civil lawsuits brought by the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC’s lawsuit alleges that Binance violated US securities laws. These challenges have prompted the exchange to reduce its European presence as well.
In addition to deregistering BML in the UK, Binance has decided to exit the Netherlands after failing to obtain regulatory approval. The company also applied for the deregistration of its subsidiary in Cyprus. Furthermore, according to local reports, Binance’s regulated French subsidiary is reportedly under investigation for alleged money laundering.
Regarding BML’s deregistration, Binance clarified that the subsidiary had never conducted any business operations in the UK. Ilir Laro, Binance’s Sub-Regional Manager for Growth in the UK and Europe, stated:
“BML was successfully acquired back in 2020 by Binance Group, intended to launch a regulated business in the UK. This attempt was not successful, however, and has since then remained dormant since its acquisition.
The cancellation of BML’s registration was deemed a non-operational event. After terminating its operational agreements with local partner Paysafe, Binance ceased the process of enabling customers in the UK to deposit or withdraw funds in British Pounds in March.
This decision resulted in the loss of the exchange’s dominant position in cryptocurrency trading volume denominated in Sterling pounds, as indicated by data from Kaiko. The exchange had previously held a significant share of trading activity involving cryptocurrencies and the British Pound until it encountered challenges with its banking partner.
While Binance’s UK subsidiary focuses on complying with the Financial Promotions Order, a mandatory rule to operate in the country effective from October 8, 2023, the exchange is navigating the regulatory landscape and addressing the legal challenges it faces.
Binance remains committed to regulatory adherence and plans to reestablish its presence in the UK. However, the company’s activities in Europe have been significantly affected, with regulatory hurdles leading to the deregistration and exit from a number of countries.
As Binance continues to grapple with regulatory and legal complexities, it is closely monitoring developments and working towards establishing a compliant framework to operate within the global cryptocurrency ecosystem.
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