Britain's Natwest Group (NWG.L) last week capped the daily amount customers can send to exchanges, including Binance. Google said this week it would only allow FCA-authorised entities to run ads for UK-based financial products on its website, after repeated FCA calls to crack down on online fraud.Ĭoncern at banks over investment scams and fraud involving crypto exchanges may also impact Binance. Still, the FCA's demand that Binance seeks its permission to offer regulated services means it would be an offence to suggest to investors it was regulated in the UK.īinance will also have to rethink plans announced last year to offer crypto trading services using pounds and euros on a platform regulated by the UK. UK investors can still access Binance via its main website, which the FCA does not have powers over. "At the moment the method is to emphasise risks to investors in the UK of these services rather than to regulate them outright," said Barney Reynolds, a lawyer at Shearman & Sterling. The Binance spokesperson said it takes its compliance obligations very seriously and is committed to following all regulatory requirements wherever it operates.īeyond a loud warning to investors, the FCA has done all it can under its limited powers over an offshore exchange, experts say. "(The FCA) don't have jurisdiction over the whole of Binance's operations, so they use the point where they do have jurisdiction and put pressure on the business there." "It's very difficult," said Simon Treacy, senior lawyer at Linklaters. Yet national regulators often struggle to rein in crypto exchanges based elsewhere, lawyers said. Justice Department and Internal Revenue Service. In May, Bloomberg reported Binance is under investigation by the U.S. In a tweet earlier on Wednesday he hinted at his views on what went wrong at FTX.Japan's regulator said last week Binance was operating in the country illegally, while Germany's watchdog said in April it risked being fined for offering tokens connected to stocks. Zhao said due diligence on the deal with FTX was ongoing, and has publicly stated he could still walk away from the deal. Zhao said he had ordered Binance to stop sales of FTT, a token issued by FTX, after a call with Bankman-Fried on Tuesday. My first reaction was, he wants to do an OTC deal . . . But here we are,” he added. I could do some mental calculations with our revenues to guess theirs, but it would never be very accurate,” Zhao said. And before that, I had very little knowledge of the internal state of things at FTX. “It was less than 24 hrs ago that SBF called me. “We did not master plan this or anything related to it,” Zhao said. The troubles at FTX were accelerated after Zhao said over the weekend his company planned to sell down more than $500mn worth of FTX’s own digital token, a sum that dwarfed its average daily trading total. The two men shocked the crypto industry when they announced on Tuesday that Binance had agreed to rescue FTX after a surge in customer withdrawals sparked a liquidity crisis. Binance declined to comment on the internal memo. The message also laid out the speed of the deal he agreed with his counterpart Sam Bankman-Fried to prevent the total collapse of FTX, which had been valued at $32bn earlier this year. Licenses around the globe will be harder to get,” Zhao wrote to staff early on Wednesday. “Regulators will scrutinise exchanges even more. But internal Binance documents seen by the Financial Times say that Binance is operating an FCA regulated business and notes that consumers will be subject to the FCA regulatory. Zhao said in a note to employees seen by the Financial Times that the bailout, which consolidated Binance’s position as the world’s biggest crypto trading venue, was not “a win”. The near collapse of FTX has “severely shaken” confidence in the crypto industry and will trigger tougher scrutiny by regulators, Binance chief executive Changpeng Zhao said a day after orchestrating a rescue of the exchange’s rival. Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
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