The Financial Conduct Authority has imposed requirements on Binance Markets Limited, the world’s largest crypto exchange company, stating it was unable to supervise the firm effectively.
Requirements imposed on the firm mean it must not, without the prior written consent of the FCA, carry out any regulated activities for which it has Part 4A permission with immediate effect.
By close of business on June 30, 2021, the firm is also required to display a notice in a prominent place on its website, and any other communication channels or social media, of the restrictions in place.
The notice to publish says: “Binance Markets Limited is a UK based company which has not yet carried out any business. Binance Markets Limited is not permitted to undertake any regulated activity in the UK.
“Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA.”
Binance was previously known as EddieUK, which is an investment firm that has been authorised since April 13, 2018. The firm has been part of the Binance Group since its acquisition by Binance Capital Management in May 2020.
In a supervisory notice dated June 25, the regulator said during 2021, the supervision team had issued two formal information requests but the firm’s responses were incomplete and included direct refusals to provide information.
For instance, the firm did not provide details about how the business and group are organised, explain what routes UK consumers could use to purchase products, or identify the legal entity behind the website.
The regulator 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 FCA said the firm had not carried out any regulated activity to which the Part 4A permission relate for a period of at least 12 months and was failing, or was likely to fail, to satisfy the effective supervision threshold condition.
The City watchdog said it had acted in order to protect consumers.
Other requirements placed on Binance include the removal of any advertising and financial promotions it currently has live, in whatever form they take by close of business on June 30.
The firm is also required to provide written confirmation of the steps it has taken to meet the requirements set out at and must secure and preserve all records or information relating to all UK consumers from its systems in their original form.
What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know