(Adds more detail)
By Huw Jones
LONDON, Aug 25 (Reuters) – The world’s biggest crypto
exchange Binance is not capable of being supervised properly and
poses a significant risk to consumers, Britain’s Financial
Conduct Authority (FCA) said in a document published on
The exchange has come under pressure from regulators across
the world in past weeks due to concerns over the use of crypto
in money laundering and risks to consumers.
The FCA banned Binance in June from conducting any regulated
activity and imposed several requirements on the platform.
Its document published on Wednesday expands on its reasons
for placing the requirements on Binance’s UK-based Binance
Markets Limited arm.
“Based upon the firm’s engagement to date, the FCA considers
that the firm is not capable of being effectively supervised,”
the watchdog said in the document dated June 25.
“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.”
A Binance spokesperson said that as noted by the FCA,
Binance Markets Limited has fully complied with all the
watchdog’s requirements and it continues 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
The FCA said it sent two requests for information about
Binance’s wider global business model and its stock tokens.
“The FCA considers that the firm’s responses to some
questions amounted to a refusal to supply information,” the
watchdog said in the document.
The exchange, whose holding company is registered in the
Cayman Islands, has scaled back its product offerings and said
it wants to improve relations with regulators.
The FCA said volumes at Binance in June were estimated to be
between $11 billion and $38 billion.
Binance’s UK arm was not currently carrying out regulated
activities and that it had not done so for more than 12 months,
the FCA said in its document.
(Reporting by Huw Jones; editing by David Evans and Emelia