Cryptocurrency companies are no stranger to controversy, and crypto exchange and blockchain Binance knows this firsthand. Regulators in the U.K. have officially banned Binance from legally operating within the nation's bounds.
What does this mean for crypto traders who use the platform, and how does Binance's fate look amid this trouble?
Why the U.K. is banning Binance
According to the Financial Conduct Authority (FCA) of Britain, Binance Markets Limited was the only Binance division legally allowed to operate in the U.K. However, that has all changed since the FCA said on June 26 that Binance is "not permitted to undertake any regulated activity in the U.K."
Binance withdrew its application to register with the FCA since it couldn't meet the regulators' strict anti-money laundering requirements.
Anti-money laundering compliance with the FCA is a multifaceted approach to prevent financial crime like money laundering and terrorist financing with brokers, insurers, and other types of financial firms.
Following the ban, U.K. users will see a bold warning on the Binance site
According to CNBC, the Binance Markets Limited website for U.K. users will display visible text on screen starting June 30. It will read, "Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. (No other entity in the Binance Group holds any form of U.K. authorisation, registration or license to conduct regulated activity in the U.K.)."
Despite the Binance ban, U.K. traders will still be able to trade crypto through the website.
The U.K. ban on Binance doesn't halt crypto traders' ability to buy and sell currencies on the website. Instead, the FCA is posing a severe warning to U.K. residents who take part in crypto exchanging. Users will still be able to access the services that Binance provides through the site.
This is because cryptocurrency trading isn't a regulated activity. However, Binance won't be able to offer securities like derivatives, which are regulated by the FCA.
The FCA's consumer warnings may or may not be enough to sway users off of the Binance platform.
The U.K. isn't the only one taking shots at Binance
Last week, the Financial Services Agency of Japan sent a warning to Binance that it's operating in the country without permission. As China wipes out domestic crypto miners, the country is taking a major step back from its previously robust blockchain presence.
In May, the U.S. launched a probe into Binance based on money laundering and other issues. Binance stated that it's pivotal in taking down cybercriminals like hackers and money launderers because it complies with divulging data as necessary. However, regulators in the U.K., U.S., Japan, and beyond don't exactly see it that way.
Through Binance, CEO Changpeng Zhao has become a billionaire. If regulators have their way with the cryptocurrency exchange, his fate could very well change. As for what's next, Binance will have to tackle regulatory woes from every angle. Consumers should heavily consider the fate of their personal crypto exchange.