The cryptocurrency market has experienced a rocky few weeks with some of the largest currencies losing value - and the news that Binance has been banned in the UK will not be welcomed by traders.
The cryptocurrency exchange has felt the wrath of the Financial Conduct Authority as part of a global crackdown on the largely unregulated market.
The news will be unwelcome for investors who have backed various cryptocurrencies such as Bitcoin (BTC) .
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However the ban is not exactly surprising given many countries, most notably China, have been clamping down on the currencies creating a rocky market for traders.
Why is Binance banned in the UK?
Binance has found itself at the behest of the FCA as it offers certain cryptocurrency products that the regulator says requires permission in the UK.
Specifically this refers to certain crypto derivatives that the company offers – such as futures – however the actual basic buying and selling of cryptocurrencies, like Bitcoin, is currently unregulated in the country.
Binance is the largest cryptocurrency trading platform in the world in terms of volume of trades so this latest news is unlikely to be welcomed by the already volatile market for cryptocurrencies such as Bitcoin and Ethereum.
What is Binance and why has FCA issued warnings for the cryptocurrency?
Binance is an online centralised cryptocurrency exchange that offers a range of financial products such as purchasing a wide range of digital currencies, crypto futures, securities, and even lending.
Binance has found itself at the behest of the FCA as they say it is not licensed to perform any regulated activities within the UK as part of a larger crackdown on the crypto markets around the world.
Binance Group is based in the Cayman Islands, while Binance Markets Limited (BML) is an affiliate firm based in London. But Binance told the BBC that the Financial Conduct Authority notice has no “direct impact” on the services it provides from its website Binance.com.
"BML is a separate legal entity and does not offer any products or services via the Binance.com website," a spokesperson from the company said. However, the company has already moved its headquarters several times to get around certain regulations from countries that it does not like and doesn’t see fitting in with its business model.
Binance controversies
This is not the first time that Binance has come under scrutiny by international regulators who are seeking to get some modicum of control on the international buying and selling of cryptocurrencies.
In the US, one of the firm's entities, Binance Holdings, has been the subject of a probe by the SEC – according to Bloomberg.
And on Friday, Japan's Financial Services Agency warned the company for the second time in three years that it is operating in the country without the proper permission.
Bank of England Governor Andrew Bailey has previously warned people that buying cryptocurrencies is a dangerous game and those who do so should be prepared to lose all their money.
