Binance crypto exchange is facing crackdowns due to regulations

Binance CEO sees compliance as a journey in such a nascent industry
  • Binance has been facing a turbulent period due to regulators globally
  • Last month UK FCA restricted Binance Markets limited to offer regulated services in the region
  • Canada’s Ontario province accused Binance of not compliant with the local regulations
  • Japan FSA allegedly claimed that the digital assets exchange had been operating unlicensed in the country
  • Thai financial regulator filed a complaint with the Economic Crime Suppression Division of the Royal Thai Police
  • Chengpeng Zhao revealed that Binance was taking a number of measures to improve its compliance

Binance, one of the leading global cryptocurrency exchanges, has been facing turbulence due to regulatory compliance around the planet. In recent developments, the Thailand Securities and Exchange Commission (SEC) had issued a warning letter taking legal actions against the digital currency exchange. Besides that, the crypto trading platform is facing some similar hits from financial regulators of Japan, Ontario, and the United Kingdom. 

Following such a scenario, Changpeng Zhao, the chief executive officer of Binance, said that compliance is a journey in such an industry that is yet in its nascent stage.

Crypto exchange Binance restricted in the UK

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The British Financial Conduct Authority (FCA) has banned Binance Markets Limited (BML) from operating in the United Kingdom. The financial regulator took such a stance in the latest sign of a growing crackdown on the cryptosphere globally. FCA highlighted that Binance Markets Ltd, which is the UK division of the crypto exchange, is not permitted to undertake any regulated activity in the region.

Notably, the trading platform was set to roll out its own digital assets marketplace in the region. However, according to a spokesperson, the cryptocurrency exchange withdrew five anti-money laundering (MLD) applications in May following intensive engagement from the FCA. Moreover, the spokesperson also clarified that the scope of the prohibition was limited.

No regulatory impacts on non-registered firms

Although BML has been prohibited from offering regulated services, non-registered firms can still interact in the region. Hence, there is no impact on

binance coin binance coin binance coin euro bank deposits euro bank deposits
Source: Binance/Twitter

However, the FCA asked to put a notice on the cryptocurrency exchange’s platform for UK users. The regulator wants the firm to warn its UYK users that it is not permitted to carry out any regulated activity in the region.

financial conduct authority's fca notice compliance staff
Source: TheCoinRepublic

Japan FSA accused the exchange of unlicensed operations

One side was a UK financial regulator, the other came from Japan, accusing the firm of operating without a license in the region. Japanese Financial Services Agency claimed that Binance has been operating in the region without the permission of official authorities.

japan's financial services agency
Source: TheCoinRepublic

Notably, for the same reason, the crypto exchange was also warned in 2018. At the time, Zhao claimed that the crypto firm was in constructive dialogues with the authorities over the matter. 

However, Binance is currently not operating in the country. A spokesperson stated that the cryptocurrency exchange is not actively soliciting Japanese users.

Ontario SEC accused the cryptocurrency exchange

While Binance was already facing hits, it has been prohibited from operating and offer its services to Canada’s Ontario-based users. In addition, the Ontario Securities Commission (OSC) had issued statements of allegations against the firm. The financial regulator claimed that the exchange failed to comply with the local regulations.

canada Canada canada world's largest world's largest localizing operations
Source: TheCoinRepublic

Following the acquisitions, the leading crypto exchange opted for shutting its business in the region. It is noteworthy that the crypto exchange chose to close shop instead of meeting the fate of other exchanges that have had actions filed against similar allegations.

Regulatory concerns of Thai SEC

Recently, last week the leading cryptocurrency exchange received another hit in its turbulent period. The Thailand Securities and Exchange Commission (SEC) issued a warning letter taking legal actions against the exchange. 

largest crypto exchange of cayman islands
Source: TheCoinRepublic

The Thai financial regulator filed a complaint with the Economic Crime Suppression Division of the Royal Thai Police (ECD). The SEC had asked the exchange to submit a written explanation for its unauthorized promotions on social platforms, which the firm failed to submit within the deadline.

The crypto exchange is still positive

On Wednesday, Zhao published a blog post following the scenario. In the post, he showed how positive the team is. In addition, Zhao mentioned that as a four-year-old crypto startup and the largest crypto exchange, Binance still has a lot of space to grow. Although the exchange has grown very quickly, still, it is learning and improving every day.

binance holdings trading pairs bloomberg bloomberg
Source: TheCoinRepublic

In terms of compliance, Zhao revealed that the exchange was taking a number of measures to improve its compliance. For user protection, the exchange is still committed to partner with regulators globally. Moreover, the platform is hiring more talent to place more systems and processes related to security.

Regulations eating up the nascent industry

Since the beginning of this year, the digital assets industry has begun with a booming performance. With soaring prices, the market has attracted several eyes globally, including those financial regulators and governments. Following the potential of the industry and increasing financial crime, regulators began to strict regulations.

regulated activities advisory board company website
Source: TheCoinRepublic

After a bigger bullish rally in mid-May, Bitcoin lost more than 50% of its value. Thus, the impact of the leading cryptocurrency was also observed over the entire market. While evaluating the reasons behind the crash, we observed that Chinese regulatory scrutiny was one of the major reasons. 

Not only China, countries like India, Nigeria, Turkey, and more are also taking harsh stances against the nascent industry.

Bitcoin also being embraced

El Salvador has become the first nation that embraced Bitcoin as a legal tender. Following the path of El Salvador, several other countries like Paraguay and Panama are also seeking to make BTC legal.

Source: PixaBay
Source: PixaBay

The legalization of the coin designed by Satoshi Nakamoto has been considered the biggest achievement by experts in the cryptosphere. However, one side of the news is positive, still, several financial regulators are dumping the market by stricting regulations.

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Ahtesham Anis
Ahtesham Anis is a Computer Science undergrad student currently based out of India. Coming from the business background and his keen interest in Cryptocurrency and Blockchain technology is what Ahtesham brings to the table. He is always an eager learner when it comes to exploring the new technologies and topics in the crypto world.

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