THE Binance cryptocurrency exchange has been banned by the UK’s financial watchdog.
We explain why the Financial Conduct Authority (FCA) has blocked Binance in the UK.
But first, a word of warning: buying cryptocurrencies, like any investment, is a very risky business and making money is never guaranteed.
You should make sure you know the risks of investing in cryptocurrencies and that you can afford to lose any money you put in.
Cryptocurrencies are highly volatile, so the value of your investments can go down as well as up in the blink of an eye.
There is also no guarantee that you can convert crypto assests back into cash, as it may depend on the demand and supply in the existing market.
As always, never invest in something you don’t understand.
What is Binance?
Binance is a cryptocurrency exchange platform for trading various cryptocurrencies.
As of April, it was the world’s biggest bitcoin and altcoin crypto exchange by volume.
Its users complete more than 1.4million transactions per second, according to its website.
Binance was founded in 2017 by Changpeng Zhao, a Chinese-Canadian developer who had previously created high frequency trading software.
Which cryptocurrency coins are available on Binance?
Binance allows international users to trade more than 500 cryptocurrencies, although only 52 are available to US customers.
It supports most of the well-known cryptocurrencies including Bitcoin. Ethereum, Litecoin and Dash.
Binance users also have access to smaller currencies such as Dogecoin and Harmony.
The platform allows withdrawals in a wide range of currencies, including US dollars, Euros and British pounds.
Its major rivals are Kraken and Coinbase – the latter which went public in the US last month.
5 risks of crypto investments
BELOW we round up five risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
Why has it been banned in the UK?
The FCA’s decision to ban Binance in the UK represents a crackdown on the cryptocurrency market.
It is one of the most significant moves by any global regulator against the digital asset firm with subsidiaries around the world.
The watchdog said Binance Markets Ltd “must not, without the prior written consent of the FCA, carry out any regulated activities, with immediate effect”.
It added: “The FCA has told Binance that by June 30 it must display a notice stating “Binance Markets limited is not permitted to undertake any regulated activity in the UK” or on its website and social media channels.”
The company must also now preserve information relating to UK consumers and inform that the FCA this has been done by July 2.
However, the watchdog has not yet explained why it had taken these measures.
Binance has not yet launched its UK business and services on its website and so won’t see a direct impact from Britain’s Financial Conduct Authority’s notice.
Binance Markets Ltd. is “a separate legal entity and does not offer any products or services via the Binance.com website,” the crypto exchange said Sunday on Twitter.
“The Binance Group acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions.”
Binance suspended withdrawals last month, announcing on Twitter that it had stopped withdrawals around lunchtime on May 10.
I saved $30k thanks to an easy rewards system, it’s even helped me buy a house
GIVEN THE CROP
I was fat-shamed & kicked out of the gym for showing my belly in a crop top
What time does McDonald’s stop serving breakfast?
7.3m Americans with unemployment checks to get refunds – can you get $10,200?
What is Bonfire and why is the price going down?
Will $3,600 child tax credits continue until 2025? All you need to know
In January, the UK’s Financial Conduct Authority warned that households risk losing ALL of their money if they invest in cryptocurrencies.
Meanwhile, a Russian 27-year-old recently became the world’s youngest crypto billionaire after his cryptocurrency Ethereum surged in value.
Who are Dogecoin’s founders? We explain all you need to know.