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Friday, Apr 19, 2024

Crypto firms drop British registration bids amid scrutiny

Crypto firms drop British registration bids amid scrutiny

A growing number of crypto asset firms are abandoning attempts to register with Britain’s financial regulator as global scrutiny of the rapidly-growing sector intensifies.

The Financial Conduct Authority (FCA) banned Binance, one of the world’s biggest crypto exchanges, on Friday from conducting any regulated activity in Britain as regulators across the world bolster oversight of the crypto sector.

Data on registrations shows the number which have been ditched has jumped by a quarter in less than a month, an FCA spokesperson said on Monday, adding that Binance withdrew its application in mid-May, without giving further details.

Crypto-related firms have since January had to register with the FCA, which oversees compliance with laws designed to prevent money laundering and terrorist financing, before doing business.

Just six firms have registered, with dozens more still being assessed but not yet deemed “fit and proper”. Around 64 have withdrawn their applications, the spokesperson said, up from 51 in early June.

A Binance spokesperson declined to comment, but said it worked closely with regulators and law enforcement “to further the security and sustainability in the industry while providing the best services and protection to our users”.

Regulatory concerns about cryptocurrencies such as bitcoin include their potential for use in money laundering and other illegal activities, as well as potential risks to consumers.

‘DECENTRALISED’


Binance, run by Canadian Changpeng Zhao, is one of the most significant players in the crypto world. It offers services ranging from digital token trading to derivatives, as well as emerging technology such as tokenised versions of stocks.

Yet its regulatory structure is opaque.

Its spokesperson declined to comment on where its holding company is based, describing Binance as “decentralised”.

Binance has been targeted by regulators across the world in recent months.

Japan’s regulator said on Friday that Binance was operating in the country illegally, a notice posted on Japan’s Financial Services Agency website showed.

“The FCA is aligning with other major regulators, notably in the U.S. and Asia,” Alpay Soytürk, compliance head at Spectrum Markets, a securitised derivatives trading venue, said.

Bitcoin, which has fallen about 18% in the last 13 days as China tightens curbs on the cryptocurrency sector, shrugged off the FCA move, and was last up 0.3% at $34,767.

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