The global largest crypto exchange by transaction volume, Binance revealed canceling the unused permit the Financial Conduct Authority (FCA) granted for its UK subsidiary.
Binance Markets Limited (BML) confirmed officially withdrawing the permits granted by FCA to operate the UK subsidiary. The permits granted Binance UK authority to offer non-crypto activities. It implies that Binance cannot offer regulated activities and products within the UK.
Binance Applies Cancellation of UK Permits
The statement by the regulator issued on June 7 indicates the firm submitted a request to withdraw the registration. The process ended on May 30 2023, with the cancellation document on the FCA’s website that it no longer has the FCA authorization to operate in the UK.
The deregistration, as captured on the FCA, is reflected on the FCA Register. The financial regulator added that the cancellations of permissions held by the firm confirm that Binance Group and affiliates no longer have the UK authorization to execute regulated business.
The Binance UK subsidiary journey traces to June 2020, when BML launched operations. Such featured the successful acquisition of EddieUK and rebranding. BML appointed Changpeng Zhao as an individual exercising significant control over the subsidiary.
Canceled Permits were Dormant and Inconsequential to Binance Operations
Binance spokesperson lauded the rebranding of EddieUK to BML. He revealed that the acquisition would facilitate the launching of Binance.UK. The resulting entity would offer the crypto exchange to the UK clients, replicating the Binance.US offering to the US residents.
The quest for deregistration is unsurprising, considering that FCA had in June 2021 served Binance’s UK subsidiary with a warning. By this time, the subsidiary was still dormant.
Binance spokesperson admitted that BML never executed services despite possessing various FCA permissions to operate in the UK. The Binance executive added that their cancellation is inevitable, considering that it would not utilize them in future.
Binance lauded the move to terminate the permits granted for the UK subsidiary in strict compliance with the recommendations issued by FCA. The exchange downplayed the speculation that the decision would affect operations on its global platform Binance.com.
The statement ruled out that Binance.com operates crypto services within the UK. Instead, the platform’s availability to UK consumers occurs through a reverse solicitation.
Binance’s Legal Battle Revisited, as Cyprus and Netherlands Exits Confirmed
The revelation of Binance’s deregistering in the UK coincides when the crypto exchange is embroiled in a legal battle with the US Securities and Exchange Commission (SEC). SEC alleges that Binance, alongside its chief executive Changpeng Zhao, ran a deceptive business offering unregistered securities.
The agency claims that Binance commingled customers’ funds at the expense of investors’ well-being. The lawsuit adds to the legal challenges Binance faces alongside the charges filed by the Commodity Futures Trading Commission (CFTC) in March. Recently, French authorities confirmed opening investigations of Binance, alleging it orchestrated several offenses leading to aggravated money laundering.
The revelation of Binance applying for the cancellation of permits granted by the FCA coincides with the Cyprus pullout. Binance revealed it would shut down in Cyprus to prioritize resources and efforts towards the mature markets in Europe.
The exit would leave Binance dealing with fewer regulated entities within the EU, considering that Binance announced the exit from the Netherlands. Binance indicated it was exiting the Netherlands for failure to secure a license to offer virtual asset services, with the Dutch regulator indicating noncompliance with the anti-money laundering laws.
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