Britain’s market regulator, the FCA, has cracked down on a cryptocurrency firm after discovering that it was ‘not capable’ of supervising the organisation in the UK. Binance Holdings Ltd is a notable cryptocurrency operation, however, its failure to provide sufficient information to the FCA about its operations in the UK resulted in this action.
A failure to provide information
According to recent reports, Binance Holdings Ltd has been investigated by the FCA. The market regulator had requested the cryptocurrency trading firm offer information on its corporate structure, business operations and more.
The company, which was founded back in 2017 has been expanding quickly due to a lack of regulations in the industry. However, as the FCA in the UK has started to righten these restrictions, the spotlight has been placed on them.
According to a spokesperson from the FCA, Binance Holdings Ltd’s failure to present this information has caused concern. They said: “This is of particular concern in the context of the firm’s membership of a global group which offers complex and high-risk financial products, which pose a significant risk to consumers.”
As a result, the FCA has warned consumers in the UK that Binance Markets Ltd, an affiliate of Binance, is not permitted to undertake regulated activity in this region.
A response from BML
Like any company in this industry, Binance Markets Ltd was not prepared to have its reputation tarnished and so issued a response to the statement.
They stated: “As noted by the FCA, BML has fully complied with all aspects of its requirements. We continue to engage with the FCA to resolve any outstanding issues that may exist. As the cryptocurrency ecosystem industry continues to grow and evolve, we are committed to working with regulators and policymakers to develop policies that protect consumers, encourage innovation, and move our industry forward.”
The FCA has asked Binance to remove all financial promotions and advertising online. Additionally, they requested a prominent notice be placed on the website to ensure users are aware from the get-go. The UK is a highly regulated market and cryptocurrency organisations are no longer being allowed to slip through the cracks.
Compliance is Key
Despite BML’s response to the FCA warning, there is still cause for concern over this organisation. The FCA takes compliance very seriously and is quick to enforce its rules if it suspects that information is not being disclosed in the manner set out in the regulations.
Compliance is key for any business operating in the financial and cryptocurrency industries, otherwise, action may be brought forward.
Neopay offers a unique platform that helps organisations to maintain compliance through KYB and KYC processes. This includes risk assessments in real time that can stop a rule breach before anything serious happens.
Get in touch with our Neopay team if you are interested in implementing our 123signed platform or are seeking compliance consulting for your organisation.