A top financial regulator in Britain has ordered Binance, the world's biggest cryptocurrency exchange, to cease regulated activity in the country, the latest move by a nation to limit crypto-related businesses.
The Financial Conduct Authority said Binance Markets Limited was prohibited from undertaking any regulated activity in the U.K., and the regulator warned consumers to be wary of advertisements "promising high returns on investments in cryptoasset or cryptoasset-related products." The move mirrors that of Japan, whose Financial Services Agency sent Binance a letter Friday warning that it is not registered to conduct business in the country.
Despite the warning shots, cryptocurrency prices climbed Monday, with bitcoin rising 4.5% and Dogecoin gaining 4.7%. The market's extreme volatility was on display last week, as hundreds of billions of dollars in value evaporated on news of China's crackdown on bitcoin mining operations, then quickly recovered.
Consumers in the U.K. will still be able to use Binance for activities the Financial Conduct Authority doesn't regulate, such as buying and selling bitcoin. In an email to The Washington Post, Binance said the notice has "no direct impact" on the services provided on its website.
"We are aware of recent reports about an FCA UK notice in relation to Binance Markets Limited (BML). BML is a separate legal entity and does not offer any products or services via the Binance.com website," Binance said in the email. "Binance acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions. Our relationship with our users has not changed."
The Financial Conduct Authority previously cautioned that scores of crypto companies that were seeking its approval could not meet requirements for preventing money laundering. The British financial watchdog named price volatility and consumer protection among its chief concerns about the cryptocurrency landscape, as well as charges and fees and misleading marketing materials.
"Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors' money," the regulator said in January. "If consumers invest in these types of product, they should be prepared to lose all their money."
Binance -- which hosts 2 billion trades on its platform daily, according to its website -- applied to register with the Financial Conduct Authority but revoked its application on May 17, the Wall Street Journal reported.
Five crypto companies are currently registered with the regulator, including Gemini and Ziglu Limited, a British digital wallet company. The Financial Conduct Authority recommends that consumers withdraw their investments in unregistered assets or firms, as they are "operating illegally."