The Financial Conduct Authority of the British government mentioned in a supervisory notice that the popular cryptocurrency exchange is incapacitated when it comes to adequate supervision and monitoring of the exposure of users to financial risks.
The notice, dated June 25 originally, was released concerning the high-risk and complex financial products from Binance that make investors susceptible to financial risk.
The original words of the statements read, “Based on the engagement of the firm from inception till date, the Financial Conduct Authority considered the firm incapable of effective supervision.”
In the notice directed to the firm, Binance Markets Limited, eventually, the FCA asked the exchanged to stop all the activities that were earlier approved for it since April 2018, including advising, dealing, and safeguarding crypto-related investments.
In addition, the financial authority asked Binance to decide the FCA public on \its platform, reading “Binance Markets Ltd is restricted from undertaking any regulated activity in the United Kingdom.”
This means that Binance will have to set up an information banner on the website – www.binance.com and its other communication channels, including social media. The crypto exchange was shut down all live advertisements in the country and should provide comprehensive actions steps taken to meet up the requirements.
The Financial Conduct Authority referred to three reasons for placing such restrictions on the crypto exchange, and they include the failure to conduct a regulated activity, failure to satisfy the threshold condition for effective supervision, and failure to secure an adequate degree of consumers’ protection.
Based on the information from the notice, Binance could not also provide the final draft of its operational plans and strategies that covers the measures to be taken to prevent money laundering and terrorism financing.
Talking about this, Binance spoke to the crypto news press; “More than anything else, we are committed to liaising with policymakers and regulators to ensure the protection of our customers and encourage innovations and eventually bring progress to the crypto ecosystem and the financial industry.”
Looking back, Binance has been affected by the regulatory agitation across the globe, and the firm has tried its possible best to comply with the regulatory measures. In a bid to ensure compliance, the exchange has implemented lower leverage options on its trading platform and stricter KYC requirements for its users.
Binance has also debunked news containing its involvement with market manipulations, but as it stands, it has faced restrictions in many regions, including Malaysia, Germany, and South Korea.