A British financial regulator called the Financial Conduct Authority (FCA) said that crypto exchange Binance refused to provide basic information about its business.
Taking this into account, representatives of the department concluded that the British division of Binance Markets Limited (BML) «cannot be effectively controlled. » Against the background of what is happening, users of the platform have concerns about the prospects for further relations between the two organizations. Let’s talk about what is happening in more detail.
As a reminder, Binance is indeed the largest cryptocurrency exchange in terms of trading volume. Over the past day, the platform’s indicator in the spot market – that is, in the sector of buying assets at market prices – amounted to the equivalent of $ 24 billion.
For comparison, the second and third places are occupied by Huobi and Coinbase with results of 5.3 and 3.5 billion, respectively.
Rating of spot crypto exchanges by trading volume
At the same time, Binance in the past few months has been increasingly exposed to active attacks from bodies like FCA in different regions of the world. Previously, Binance’s management was forced to introduce a compulsory identity verification procedure for all users of the exchange just at the request of financial regulators.
Accordingly, now new and existing users must verify their identity, that is, present an official document. Note that although the requirement to go through the procedure has become massive, there are no delays in confirming the data. Specifically, we went through Binance Identity Verification last week. Fifteen minutes was enough for everything.
Binance’s problems in the UK
In a recent statement, the Financial Conduct Authority noted that Binance refuses to comply with their demands. Here is a quote from a representative of an organization in which he shares his attitude to what is happening. The cue is from Decrypt.
The FCA believes that the firm’s responses were incomplete and included outright denials of information. The company is unable to clearly define all the features of its business and infrastructure organization.
Accordingly, the department does not have enough data in order to effectively interact with the leadership of the trading platform.
Binance CEO Changpeng Zhao
In addition, Binance refuses to clarify the specifics of working with its UK clients and to disclose the official data of the organization that operates the binance.com website. Decrypt reporters have approached the exchange eight times this month alone for an interview about the Binance Group. Unfortunately, none of these requests received a response.
Back in late June, in a regular public announcement, FCA decided that at this stage of relations with the exchange, it is almost impossible to regulate its activities. Here is a response from the staff.
Based on current interactions with the firm, FCA believes that it cannot be effectively supervised. This is of particular concern in the context of the firm’s membership in a global group of companies that offers sophisticated, high-risk financial products.
Zhao’s tweet reporting on reaching a regulatory agreement with the FCA
Although this week the UK Financial Conduct Authority issued a new statement. According to the quote, Binance «was able to meet all aspects of the requirements» that were announced in June.
The BML division was formerly called EddieUK and was registered in the country on April 13, 2018. The firm was acquired by Binance in May 2020 with the aim of expanding into the local market. However, FCA still believes that the requirements of the regulator in this process were not met. Notably, a Binance speaker previously issued a statement with the following quote.
As noted in the FCA, Binance Market Limited fully complies with all the requirements of the regulator. We continue to keep in touch with FCA to resolve any potential issues.
We believe that this situation is unlikely to seriously affect the operation of the cryptocurrency exchange. Still, Binance has done a lot in recent weeks to please regulators in various countries. And if earlier the platform was active without the obligatory confirmation of the identity of its users, now its affairs will probably go better in the context of various government departments.
