FCA bans Binance: World’s largest cryptocurrency exchange platform in the UK
Binance, the largest cryptocurrency marketplace in the world covers business over trillions. The company helped around $3.88 billion transactions each day during the 2020 business session in exchange. Though the crypto market took a toll during the mid-quarter of 2021, the marketplace is still thriving. But the company recently got hit by the Financial Conduct Authority (FCA).
FCA discuss and handles financial activity in the UK. And on a recent note, they banned the exchange of cryptocurrency via Binance. The company is pretty successful and conducting business with many countries of the world. But a recent prohibition of the platform may let the users fall into a downtime. These users are in the trading business inside the crypto market. Stocking and investing in crypto is an unstable way to financial gain. Though many became successful on the journey, a good number came to loss. And the large business platform is helping in both ways.
To follow through the routine, the business needs “prior written consent of the FCA” for activities. In the past regularities were not conducted in a permitted manner but done in a free flow business pattern. Which is not great to calculate and keep papers on people’s finance. This is why regulators of finance want people to stay away from the exchange platform.
Last year October, FCA announced certain motives which indicated the UK authority is on the move to stop cryptocurrency exchange and crypto-related products. Bitcoin, Ethereum or Ripple are high risk, high reward items and has scope to abuse the market in different ways. Crypto assets may sound intriguing but deep down it has many loopholes which general people fail to understand as far as FCA’s concerned.
Though Binance received a letter of commendation from the UK South East Regional Organised Crime Unit recently, the company is still on the blacklist. The company highlighted this achievement of working together with the crime unit. Together they unveiled a supply of “class A” controlled drugs via the dark web in exchange for crypto.
The Financial Conduct Authority dint stop there. They were concerned about general users and posted online adverts on various social media platforms to rethink their decisions.
According to the FCA, it is not a good idea to invest in a crypto market that promises a high return. Even it may be other crypto-related products. FCA authorises the financial service compensation scheme, and platforms without it are not legalised properly. Especially the FCA authorisation specialises in high-risk items such as the cryptocurrency market.
Meanwhile, Binance is clinging to the $500M ransomware cyber laundering issue that helped the criminal division. And according to Binance, their “commitment to ensuring the secure and sustainable growth of the global crypto ecosystem involves fighting different strains of ransomware and fraud."
FCA is further concerned about the crypto market as a whole. Because they don’t meet regulatory judgement, everyone should have a clear view and goal before leaping forward. So, banning Binance is the first step towards many that are aimed toward stopping crypto fraud and losses. “Binance Markets Limited is not permitted to undertake any regulated activity in the UK", said FCC.
As unstable as the crypto market is, we’ve seen a huge rise in prices and the mid-quarter, we are spectating a gradual downhill movement of prices. In October 2020, FCA warned about the cryptocurrency ban and advised investors to move out of the queue for safety procedures. But after the financial review and a volatile pricing wave, the move came further at full tilt.
Commendation letter received from the organised crime unit came before the FCA ban, which is unfortunate. Though many countries are adapting to the changes in the crypto market, many are against legalising it. And those are the large players.
Binance as a platform has seen over a 700 per cent increase in daily active users since 2019. With over $31.9 billion of order volumes, the future seems promising. At the same time, the exchange platform is donating millions.