Binance’s Vow to Change UK Watchdog’s Mind
Binance, the world’s largest cryptocurrency exchange, has vowed to do everything it can to change the UK regulator’s mind about its capability of being regulated in the country. In 2021, the Financial Conduct Authority (FCA) said that Binance was not capable of being effectively supervised. Binance’s executives, however, are not taking no for an answer amid deepening scepticism about digital assets. The FCA requires crypto-exchanges to prove that they have systems in place to prevent money laundering and terrorism financing, and it remains to be seen whether Binance can satisfy the UK’s regulatory requirements.
Opacity Remains an Issue for Binance in the US
At present, Binance has been accepted by some oversight regimes, but has been rejected by others. In the case of the US, the business is currently under scrutiny from the authorities. That opacity remains an issue in the US, particularly with the Commodity Futures Trading Commission, which oversees the market for derivatives. The CFTC sued Binance in March, describing it as an ‘opaque web of corporate entities’ and alleging that its reliance on a maze of firms to operate the platform was designed to obscure the company’s ownership, control, and location. Although the UK government plans to make the country a global cryptoasset technology hub, it has limited resources currently available for the regulation of companies like Binance. It remains a massive ask for one country to take on the regulation of Binance, with the company being a ‘multifunction organisation’ that offers a range of products from broking to high-frequency derivatives trading.
Regulating Binance a Big Challenge for UK Regulators
Regulating Binance would be a big challenge if the company sought authorisation for its full range of activities, as it would require the hiring of locally based support functions, the core of which would need to be money laundering and compliance. Furthermore, Binance’s decision to vow to do ‘everything’ it can to change the UK regulator’s mind about its capability of being regulated may have come too late, as the scepticism surrounding digital assets grows. The issues surrounding opacity in the US and the FCA’s concerns regarding money laundering and terrorism financing may make it much more difficult for Binance to achieve effective regulation in the future.
Read More Here https://www.theguardian.com/technology/2023/may/27/is-binance-capable-of-being-regulated-crypto-exchange-uk
