The world's largest crypto exchange is having a hard time convincing regulators with multiple bans piling up
- Britain's financial watchdog has banned
Binancefrom conducting any regulated activity in the country.
- The cryptocurrency exchange faces a more severe crackdown in Canada. Amid regulatory pressure, the company announced it will cease all service in the region by year-end.
- Japan's regulator has also warned that Binance is operating in the country illegally.
While developing countries are thinking of adopting Bitcoin as a legal tender, following El Salvador’s lead, not every central bank, government, and economist is as amped up about the digital currency revolution.
Amid the fear, uncertainty and doubt (FUD), Binance is in icy waters where conventional financial norms meet cutting-edge technology.
Binance is facing resistance in developed economies
Britain's financial regulator has banned Binance because it doesn’t have any approval in writing. However, this does not mean that local investors in the UK can’t trade.
Nonetheless, this is yet another massive bump in a series of crackdowns by regulators worldwide that has rattled crypto investors, including those in India, causing prices to decline.
While trading cryptocurrencies is not directly regulated in Britain, offering services such as trading in cryptocurrency derivatives requires authorisation. As part of the FCA's actions, the regulator has ordered Binance to display the following message on its website by July 30 — "Binance Markets Ltd is not permitted to undertake any regulated activity in the UK."
In Japan, the county’s Financial Services Agency (FSA) has issued another warning about Binance business with its residents. According to the FSA, companies wanting to provide crypto exchange services in Japan must register with the regulator — something that Binance has not done.
In fact, it was pulled up on similar accusations three years ago. At the time, the regulator said Binance would face criminal charges if it continued to do business without a license.
Meanwhile in Canada's Ontario province, Binance has pulled out of its volition. The move comes after the Ontario Securities Commission (OSC) accused it and several other crypto trading platforms — including Bybit, Poloniex, and Kucoin — of failing to comply with local regulations.
However, the entire episode has been very hush-hush so far. Binance simply announced that it will no longer serve any users from the region but gave no details about what transpired with Ontario authorities nor did it hint at any future progress or potential relief.
Bitcoin's value has crashed massively in the last few weeks and continues to test its limit. With China
clamping down on mining, multiple factors have collectively contributed to the downfall. Binance Holdings, a subsidiary in the US, is being
investigated for dealing with laundered money and evading tax. A similar
show cause notice has been filed against Binance's India subsidiary WazirX by India's Enforcement Directorate (ED).
Convincing the regulators isn’t easy
It remains to be seen how crypto exchanges can find a middle-ground with authorities since it’s a common belief that decentralised design of cryptocurrencies makes it easier to carry out illegal transactions and discreet offshore transfers.
AdvertisementFor now, exchanges like WazirX and others, have opted for self-regulation in a few countries like India — but that means little without independent and transparent audits by third parties.
Binance started out in Shanghai, China, but had to find a new home amid the crypto ban there. Since then, it has operated from unpopular territories that are sure to raise a red flag with regulators. Currently, it is registered in the Cayman Islands and Seychelles.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
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