Binance faces regulatory volatility as lawmakers target exchanges

The world’s largest cryptocurrency exchange, Binance, faced regulatory upheaval over the past week as jurisdictions cracked down on the use of unauthorized exchanges and warned citizens not to access them. For Binance, the introduction of the nickname “Global Exchange” did little to appease regulators who need special licenses to offer financial services to their citizens.

Below is a brief summary of the latest regulatory actions surrounding Binance.

Japan

On June 25, the Japanese Financial Services Authority (FSA) accused Binance of operating in the country without proper registration – possibly setting the stage for a protracted legal battle with cryptocurrency exchanges. This is because, unlike other jurisdictions, Japan has introduced specific registration and operating rules for crypto exchanges since at least 2018. Instead of following the guidelines, Binance decided to relocate operations to Malta in 2018.

Connected: 71 billion US dollars in crypto since 2017 allegedly moved to the “Blockchain Island” Malta

The FSA warning isn’t just limited to Binance either. In May of this year, the regulator warned the derivatives exchange Bybit of a violation of the registration rules.

Ontario, Canada)

Simultaneously with the warning from the Japanese FSA, Binance announced that it would cease all activities in the Canadian province of Ontario after the provincial securities regulator introduced new measures against the exchange of cryptocurrencies.

On April 19, the Ontario Securities Commission (OSC) introduced a new prospectus and registration requirements for cryptocurrency exchanges. Using this as a benchmark, the OSC has selected two crypto exchanges – Bybit and Kucoin – for allegedly “bypassing” Canadian securities. Rather than complying with the new regulations, Binance decided to exit the market entirely, allowing users to liquidate and close their accounts by the end of the year.

United Kingdom

Binance hit the headlines again on Sunday after the UK’s Financial Conduct Authority (FCA) ordered the exchange to suspend all “regulated operations” in the country. This is interpreted by many as a total ban on the use of Binance to buy and sell crypto in the UK. In the meantime, according to users, transactions in the local currency pound have been blocked.

Binance positive that the announcement affects FCA Binance Markets Limited, a separate legal entity that the company acquired in May 2020. As such, it “does not offer any products or services through the Binance website.” Com, the company said.

We are aware of recent reports of an announcement by the UK FCA regarding Binance Markets Limited (BML).

BML is a separate legal entity and does not offer any products or services through the https://t.co/QILSkzx7ac website. (1/4)

– Binance (@binance) June 27, 2021

However, as of June 30th, Binance must notify UK users of FCA restrictions on their website and mobile apps.

Germany

In April of this year, the German financial supervisory authority (BaFin) warned Binance of a fine of up to 6 million US dollars or 5 million euros for providing security tracking tokens without an investor prospectus. Specifically, BaFin has addressed problems with digital tokens that track blue-chip stocks such as Microsoft, Apple and Tesla. According to the Financial Times, Binance has notified the regulator that their digital security tokens are not securities because they are purchased through a third-party provider and cannot be transferred to other exchanges.

United States

Binance operates in the United States through a special exchange called Binance.US, but it has also undergone a review in recent months. In May of this year, Bloomberg reported that Binance was being investigated by the Justice Department and the Internal Revenue Service in an investigation into money laundering and tax evasion.

Connected: Binance sued for allegedly facilitating money laundering with “loose KYC”

Changpeng Zhao, CEO of Binance, declined Title of the report by pointing out that Binance has worked with US law enforcement agencies to “fight the bad guys.”

The headline “news” sucks. The article itself isn’t really bad (but who’s reading it). How does it describe? @binance has teamed up with law enforcement to fight the bad guys, but somehow it feels bad … anyway. Back to work.

– CZ Binance (@cz_binance) May 13, 2021