The Financial Conduct Authority (FCA) The U.K. published a supervisory notice on Wednesday, stating that prominent cryptocurrency exchange Binance is unable to be effectively supervised and exposes users to financial risk.
The FCA notice – originally dated June 25 – related to Binance’s “complex and high-risk financial products”, which pose significant risk to investors.. He said:
“Based on the company’s commitment to date, the FCA believes that the company is not capable of being effectively supervised.”
In the notification addressed to Binance Markets Limited, The FCA required the crypto company to cease authorized activities as early as April 2018, such as advising, safeguarding and trading crypto investments.
What’s more, the financial watchdog has asked Binance to display the FCA decision which reads: “Binance Markets Limited is not authorized to conduct any regulated activity in the UK.”
This means displaying the message prominently on the Binance website and on any other communication and social media channels. The exchange was also asked to remove the live announcements and promotions and “provide written confirmation of the steps it has taken to comply with the requirements.”
The FCA cited three main reasons for imposing restrictions on Binance, which include failing to carry out a regulated activity, failing to satisfy the Effective Supervision Threshold Condition, and failing to ensure an appropriate degree of protection for consumers.
According to the notification, Binance has also not shared a final draft of its business plan and strategy that demonstrates prominent measures against money laundering and terrorist financing. In this regard, Binance told Cointelegraph:
“We are committed to working with regulators and policy makers to develop policies that protect consumers, foster innovation, and advance our industry.”
Binance has been on the receiving end of regulatory heat around the world and has stepped up its efforts to comply with regulations. In its effort, the cryptocurrency exchange has imposed lower leverage options and stringent Know Your Customer requirements for all Binance users.
The exchange has denied all allegations of market manipulation, but still faces resistance from numerous jurisdictions.such as Germany, Malaysia and South Korea.