By Shelly Melancon (Switzerland)
Last week, several reports claimed that the top UK bank, Barclay’s Bank, has barred all Binance-related crypto transactions. However, the bank has since confirmed the reports and further disclosed that there is no set date to reverse this decision. Late last month, the financial crimes authority (FCA) notified the public that no regulated financial transactions in the UK would allow transactions with Binance Markets Limited (BML).
The regulatory body further warned the public to be wary of investing in the virtual asset market. However, Binance released a rejoinder FCA’s notice a few days later stating that the BML and Binance.com are completely different entities in all ramifications, and its customers can continue transacting on Binance.com.
Other UK banks have also acceded to the FCA’s notice. Starling and British Monzo banks have stopped crypto transactions to all crypto exchanges, including Binance. The actions by the FCA and Barclays on Binance activities in the UK is another step towards updating the country’s crypto regulation, especially as it relates to crypto exchanges.
Recently, crypto exchanges are also facing updated regulatory issues in various countries such as the United States, Japan, Canada, Caymans, and Thailand. FCA’s decision has had an impact on the Binance coin (BNB) price. It declined by about 25% and now trades at less than $295.
More Problems for Binance
Aside from the UK, financial regulators in other countries have also alleged Binance not to have the required license to operate as a crypto exchange. The US Internal revenue service and its justice department revealed that they were investigating the exchange in May.
Then, late last month, Japan’s financial services agency notified the exchange for a second time to register appropriately or face proper sanctions. Also, the Ontario Securities Commission (OSC) and Thailand’s Securities and Exchange Commission sued the exchange as part of unregistered exchanges.
While the OSC’s lawsuit happened in the last week of last month, that from Thailand occurred last week. There was another bad news for the exchange last week. The Cayman Islands Monetary Authority (CIMA) alleged that the exchange’s services do not cover crypto services.
Binance was founded by Changpeng Zhou in 2017 in China but has since moved to Japan then to Malta. But now, it calls itself a decentralized exchange without any headquartered location. However, it is yet to disclose the firms it uses for its exchange operations, their locations, and whether they have the appropriate operating license.
FCA Calls for More Customer Clarity
Apart from calling out Binance, the FCA also notified other exchanges to clarify how they protect their customers’ money. They were also informed to let customers know the difference between depositing money in a normal bank account and depositing money with exchanges.
The FCA wrote, “we implore all crypto exchanges to notify their customers of their risk exposure when they deposit funds with them; it is only fair that they do so. Also, they must indicate where the financial services compensation scheme (FSCS) isn’t applicable.”
The FSCS scheme is designed to protect individuals or firms with at least 85,000 pounds in deposit. However, the scheme will only pay compensation when the financial institution of deposit ceases to operate.
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