This new era of digital transition is giving cryptocurrencies the opportunity to win greater visibility, beginning to position themselves as more accessible and alternative means of payment to traditional banking. In addition to this, in recent weeks the crypto landscape has had a lot of movement as a result of the incorporation of Bitcoin as legal tender in El Salvador.
On the other hand, the last few days have also been problematic for the crypto environment. What could present a regression in the confidence and security that they have recently gained. We are talking about the blockade imposed by the FCA to one of the subsidiaries this June 27.
Binance faces a block on its regulated activities within the UK
Binance is one of the largest cryptocurrency exchange platforms in the world. with some 1,400,000 daily transactions in more than 300 virtual currencies. Despite its great impact on the market, this company of Chinese origin does not have a central headquarters, but works from its website, and different subsidiaries in the countries where it manages.
The prohibition of FCA either Financial Conduct Authoritythe financial control body of , occurred precisely on one of these subsidiaries: Binance markets Limited. According to what was expressed by the FCA, this company would be operating without the proper permits and authorizations for the development of financial activities. For this reason, the FCA has given a deadline until June 30th for the company to cease its activities in the country.
We are aware of recent reports about an FCA UK notice in relation to Binance Markets Limited (BML).
BML is a separate legal entity and does not offer any products or services via the website. (1/4)
—Binance (@binance)
However, this ban will not affect the normal course of UK market buying and selling activities on the Binance site. As the exchange platform exposes in its tweet, Binance Markets Limited is a separate legal entity from them. Similarly, the prohibition of the FCA does not apply to the exchange of cryptocurrencies, since these transactions are not regulated by financial organizations, since they do not have jurisdiction over this area. But they do have control over derivative services such as futures contracts, CFDs and insurance. More specific financial services emerging through the crypto ecosystem.
How it affects Binance’s position in the cryptocurrency market
Although this regulation does not directly affect Binance’s main market with the exchange of cryptocurrencies, it does deal a blow to its image in the digital landscape. Especially if we take into account that it is not the first time that it has presented this type of problem.
The FCA’s actions have been following a series of warnings issued by the Japan Financial Services Agency, FSA for its acronym in English. In these, the Asian financial control body showed that Binance was carrying out unauthorized operations with cryptocurrencies in the Japanese market, being the second time that the FSA exposed this problem, after a first warning in 2018.
For its part, the German Federal Financial Supervisory Authority had warned in April of certain irregularities with the exchange platform. In this case, it would be a violation of the securities regulations in the country with the launch of its share tokens. A derivative service in which users can acquire, through its platform, small portions of shares of a company. An initiative, which as we see in the following tweet is supported by shares of Tesla.
In this way, the expansion of Binance services is a source of concern for the legislative entities of the different countries, since most of them do not have the permissions and security terms required by these entities, to guarantee the security of the parties, not having the proper controls against money laundering and terrorist financing.
How this situation affects Binance’s business in Spain
Both in Spain and in Europe Binance is positioned as the exchange platform par excellence, above others such as Coinbase. As in other countries, here Binance is not properly regulated by the financial control body, the CNMV, due to the lack of appropriate legislation on the cryptocurrency economy. Even so, Binance is included in a list of delimited entities of the CNMV, which groups those that do not have an authorization or registration, but that could be providing financial services. This list as such does not imply any illegality of the companies, but rather a lack of more appropriate legislation.
Taking this into account, Binance moves in the same gray space as in the other countries, which could lead to future actions if there is any suspicion. At the moment, the CNMV has not ruled on this case or implied that it will take any action against the exchange platform.
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