Binance: Barclays Blocks Payments to Binance Crypto Exchange Days After FCA Ban on UK Arm – Why Is It Facing Action?

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Binance: Barclays Blocks Payments to Binance Crypto Exchange Days After FCA Ban on UK Arm – Why Is It Facing Action? (Image: Getty Images)

Since the FCA issued the warning regarding the safety and security of the Binance cryptocurrency exchange, the company has come under increased scrutiny from customers, regulators and banks. .

The move is part of a wave of international action by state authorities around the world that have expressed alarm over the rapid rise in crypto and the centrality of emerging avenues for money laundering and crime. organized.

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On June 21, the Chinese government said it would clamp down on the massive volume of cryptocurrency mining underway in the country, with the impact of the announcement being falling prices for Bitcoin, Dogecoin and Ethereum.

UK Binance Website Now Displays Notice Regarding FCA Warning In Response To Binance Markets Limited Ban Read More

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South Korea, another crypto hotspot, recently seized cryptoassets from around 12,000 citizens accused of tax evasion with a total value of more than $ 47 million, while Metropolitan Police carried out the UK’s largest cryptocurrency seizure to date in a money laundering crackdown by seizing around 114 million cryptocurrency. .

Here’s everything you need to know about what the new moves against Binance mean.

What is Binance?

Binance is a cryptocurrency exchange used around the world by people looking to trade cryptocurrencies like Bitcoin, Ethereum and more, with its website providing a centralized platform for participating in trades. decentralized money exchanges by buying, selling or obtaining loans secured by cryptoassets.

Based primarily in the Cayman Islands, the Binance Group has an assortment of entities around the world, including London-based Binance Markets Limited.

Although he recently received a letter of recommendation from the South East UK Regional Organized Crime Unit for [their] Cooperation in assisting our investigations relating to the provision of Controlled Class A Medicines via the Dark Web, Binance has now become an increasingly watched subject for regulators in the UK.

Did the FCA ban Binance?

The FCA said in its statement that Binance Markets Limited, a subsidiary of the largest company in the Binance group, “is not authorized to undertake any regulated activity in the UK and, under FCA requirements, cannot attempt to do so without the prior written consent of the FCA.

The financial authority’s move comes after plans for a new regulated Binance UK affiliate and a UK-based crypto exchange failed to materialize.

In addition to this, the FCA has issued a warning to consumers regarding Binance Group and the services offered on its website, Binance.com, to UK users advising them of the risks of using Binance.com and investing in crypto. decentralized currencies or crypto-assets that are not regulated. by state or traditional monetary authorities.

No other entity in the Binance group holds any form of authorization, registration or license in the UK to conduct regulated activity in the UK, the FCA added.

The Binance Group appears to offer UK customers a range of products and services through a website, Binance.com.

Describing themselves as the largest crypto exchange in the world, Binance and similar exchanges must be registered with the FCA in order to fully operate and promote their services in the UK.

And while cryptocurrencies like Bitcoin and Ethereum are unregulated, some crypto-asset derivatives like futures and contracts for difference – allowing traders to bet on future crypto price movements rather than to buy real cryptocurrencies are regulated by the FCA.

Binance tweeted in response to say that the FCA’s advice has no direct impact on the services it provides on its exchange platform.

“BML is a separate legal entity and does not offer any products or services through the http://Binance.com website.

“The Binance Group acquired BML in May 2020 and has yet to launch its UK business or use its FCA regulatory clearances.”

The FCA’s warning and crackdown on consumers is not entirely surprising, however.

Statements similar to FCAs regarding Binance’s services and operations have been issued in Japan and the Cayman Islands where Binance is primarily based.

Bloomberg recently revealed that the massive crypto exchange firm Binance Holdings Ltd is under investigation by several US federal departments, including the US Department of Justice, the Internal Revenue Service, and the Commodity Futures Trading Commission. , for potential criminal activity.

Thailand’s Securities and Exchange Commission filed a criminal complaint against Binance on Friday, July 2, for operating certain unlicensed cryptoasset services after Binance failed to provide written correspondence in response to the initial warning from the organization in April.

How have Binances UK clients been affected?

UK customers using Binance services will still be able to use the platform, but the FCA warning urges consumers to be careful and be aware of the greater risks when investing in cryptocurrency.

The FCA, however, has a deadline of March 31, 2022 that crypto asset companies must meet and register in order to continue trading in the UK.

Key to the FCA’s concerns about cryptocurrency operations is the rise of scams on social media platforms, where users are often approached out of the blue for investment opportunities in coins like Bitcoin, Dogecoin and Ethereum.

According to the FCA, those who use such platforms and trade cryptocurrencies should do more research into the product you are considering and the company you are considering investing with.

On June 28, UK-based users began reporting that following confusion over Binances’ future in the UK, they were unable to make deposits or withdrawals from faster payments in GBP from their Binance accounts.

Those who logged into their account and prepared to make withdrawals were faced with a notice that the payment channel for UK users to make quick withdrawals from their sterling accounts was under maintenance.

Although it has since been resolved, the issue has left many UK Binance users frustrated and skeptical about the timing of this maintenance, which comes just hours after the FCA warning and ban were announced. of Binance Markets Limited online.

Binance has now posted a notice on its UK website in accordance with the FCA’s reporting requirements.

Has Barclays Stopped Payments to Binance?

Today (July 5), Barclays Bank informed UK customers who had previously made payments to Binance that it had blocked payments on the platform until further notice, telling customers it had been done. to help protect your money.

Barclays customers received the following message:

As you made a payment to Binance this year, we wanted to let you know that credit / debit card payments to them are on hold until further notice.

It is to help you keep your money safe.

“For more information, please search FCA Binance online.

A Barclays spokesperson said: As of today, Barclays intends to stop credit and debit card payments to Binance.

“This action does not impact the ability of clients to withdraw funds from Binance.

The decision was made following FCA’s warning to consumers, to help protect our customers’ money. “

Once again, Binance took to Twitter and responded to what it called a disappointing move from partners like Barclays, citing it as based on what appears to be an inaccurate understanding of events.

They added: We take our compliance obligations very seriously and are committed to working collaboratively with regulators to shape policies that protect consumers, encourage innovation and advance the industry.

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