The UK Financial Conduct Authority (FCA) has approved Binance Markets Limited (BML) request to deregister, making it official that no entity within Binance operates with authorization from the UK’s financial watchdog. This decision follows heightened scrutiny from regulators worldwide, affecting Binance’s presence in countries such as Cyprus and the Netherlands.
Despite Binance’s sub-regional manager for growth in the UK and Europe, Ilir Laro, explaining that the deregistration of BML will have no impact on Binance’s overall operations, this episode does highlight the challenges crypto exchanges face when attempting to establish a regulated presence. Laro clarified that BML, acquired by Binance in 2020, intended to launch a regulated business in the UK but never became operational, remaining dormant since its acquisition.
Previously, the FCA issued a warning against BML for providing regulated services without prior written consent. This reflects a broader, ongoing battle between Binance and UK regulators since the exchange’s crypto services launch in the country. Furthermore, other setbacks, such as local partner Paysafe severing ties with Binance and ceasing Sterling withdrawals and deposits for UK clients, add to the uncertain regulatory landscape for crypto exchanges.
Binance’s legal troubles aren’t limited to the UK, with two US lawsuits initiated against the exchange by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Experts are hinting that another lawsuit from the Department of Justice (DOJ) may be on the horizon, further complicating matters for the world’s largest crypto exchange.
In response to these challenges, Binance decided to withdraw its Cyprus virtual asset service providers (VASP) registration in preparation for the upcoming Markets in Crypto-Assets (MiCA) regulations. Similarly, the exchange halted its services in the Netherlands after failing to obtain the required licensing.
These developments raise questions about the future of crypto exchanges and the need for adequate regulatory frameworks that ensure safety and compliance. On the one hand, proponents argue that these measures serve to protect investors and maintain stable market conditions. Conversely, skeptics fear that excessive regulatory measures might stifle innovation and hinder the growth of the crypto industry.
As the world’s largest crypto exchange navigates turbulent regulatory waters, it remains crucial for investors to conduct their market research and stay informed about ongoing developments. Binance’s recent hurdles underscore that the right balance between regulatory enforcement and fostering innovation in the blockchain industry is still a work in progress.
Source: Coingape
