Regulating Binance’s activities in the United Kingdom might present certain challenges to the regulators.
FCA says it isn’t capable of supervising Binance
Binance has come under pressure in the United Kingdom over the past few months. This came after the Financial Conduct Authority (FCA) warned Binance about operating in the UK without a license, leading to some major banks such as HSBC and Barclays blocking Binance transactions.
A new report from the Financial Times reveals a memo issued by the FCA earlier this year. According to the supervisory notice, the FCA admitted that it doesn’t think Binance is capable of being supervised by the regulator.
The FCA said, “Based upon the Firm’s engagement to date, the FCA considers that the Firm is not capable of being effectively supervised. This is of particular concern in the context of the Firm’s membership of a global Group which offers complex and high-risk financial products, which pose a significant risk to consumers.”
The report added that the FCA had a request for information from the cryptocurrency exchange, stating that the data provided by Binance in the past were insufficient.
Binance is facing regulatory pressure in several countries
The cryptocurrency exchange is currently facing regulatory pressure in several countries. Regulators in the Netherlands, Malaysia, Italy, Cayman Islands, Spain and Hong Kong have all warned Binance about operating in those jurisdictions without a license.
On its part, Binance has been making changes to how it operates, removing derivative trading services in some countries. Binance is also hiring ex regulatory executives to ensure its operations are compliant with the rules of law.