Why would you say that? Providing services to any British citizen over the internet will fall squarely within the regulatory domain of the UK, regardless of the website used to connect, the physical location of the server or the jurisdiction of the company.
They seem to have a number of offices in places, one per country. The US one is in Fresno, CA.
Their headquarters is in Malta.
They sell derivatives, and they are headquartered in Malta. Who actually uses good or services from these people?
The whole thing with this is it shows how powerless nationstates have become in their ability to regulate these kind of things. Binance has the possibility of being regulated to death, but what about the decentralized derivitives exchange DxDy or Sythetix? Here in the US it is illegal as a retail investor to have more than 3x trading leverage on securities. I can get access to 10x leverage on Sythetix as a retail trader which is technically illegal, but since it's not a security it's in this weird gray area. Even if the US finally starts understanding the possibilities inherent in crypto, they wouldn't be able to stop it even if they brought the whole weight of the US nationstate ontop of it. It's decentralized. You'd have to shut down Eth, Matics, DOT, Solana, Etc. To stop these kind of exchanges. Each of these orgs might have a few people to arrest or point too, but are largely 'Decentralized' and already on the blockchain.
The USA did exactly this with a large publicly traded UK company. They arrested the executives the moment they touched down in the US on a transfer flight.
The CEO is now going to jail: https://casinobeats.com/2020/03/26/pokerstars-founder-isai-s...
Are Binance not required to make would-be customers jump through all sorts KYC shaped hoops?
If it goes so fart that regulators start send subpoenas or other legal requests to banks Binance uses, those banks will comply if they want to have transactions in UK. Alternative is that all money transfers from UK will cease. Not only Binance would be cut from the UK but also other bank customers.
/s
Are you referring to just the BML subsidiary or Binance Group? Binance does provide its own coin (BNB), which can be used to pay fees on their exchange. That they provide access to an exchange people pay to use, seems like a service.
> How can that be? In general, the FCA can only regulate companies that are either based in Britain or that actively promote products there. A bitcoin trading platform registered elsewhere doesn’t necessarily count: according to Forbes Binance is based in the Cayman Islands. Founder Changpeng Zhao sought regulatory approval for Binance Markets, but its main services are unregulated and offered instead by the parent group. It’s not clear what he did to irk the FCA, or whether his customers will care. What’s obvious, though, is that the watchdog lacks powers to police a fast-growing part of the financial sector. (By Liam Proud)
Futile UK crypto curb flags regulatory blind spot
https://www.reuters.com/breakingviews/futile-uk-crypto-curb-...
The "impact" of this is that the regulators are beginning to take actions against the wild-west of the crypto world, regardless of how toothless each individual action is.
Put aside your opinions of cryptocurrencies as a technology...there's no way sovereign governments were going to let this fly. There fireworks are just starting.
Defi protocols (at least on eth) are open source, so I can verify that they are doing what they are supposed to be doing and use those products. It would be far from ideal if some regulator decided that we can't use it because reasons x,y,z.
They don't stop innovative financial products from being built, they might stop them from being used for a particular purpose or even at all depending on how a particular development impinges on the list of items for which they regulate.
Amongst others, and depending on where you live your local regulators may add or subtract from this list considerably:
- fairness
- transparency
- stability
- anti money laundering
- anti terrorism financing
- tracking of ultimate beneficiary owners
The company I work for is owned by a huge French bank. Even though I am in tech I still need to do some mandatory (legally required) training, and one of the courses is Treating Customers Fairly.
The FCA say "Treating customers fairly is a requirement for all regulated firms, no matter their size or the nature of the activities they undertake".
Not for you to say. Society as whole decides which regulations are ideal.
Famous people are literally pumping scams to millions of followers on social media every single day, so I'm not sure a couple people getting sued means anything.
> Human society, the historian Niall Ferguson says, oscillates between the dynamic of a metaphorical “tower” and the “square”. Sometimes institutions or leaders control social groups in hierarchical ways, just as church towers overshadowed medieval European cities.
> At other times, horizontal networks shape events, operating like crowds in ancient city squares. The “square” used to work best in small, face-to-face groups, but digitisation now enables peer-to-peer systems to operate on a massive scale.
> Now, however, a “tower” dynamic is entering the frame. On Wednesday, the Bank for International Settlements (the central bankers’ bank that, in a delicious irony, occupies an actual black tower in Basel) issued a striking report that lashed out at the “square”.
https://www.ft.com/content/9481d93d-c7ef-4749-9916-bc860d538...
Well, you say, they wouldn't get registered because they wouldn't have what they would need to provide a fair risk to customers. Then what? People will simply run the exchanges elsewhere and the money will keep getting "lost", "stolen" or seized by the authorities.
This undue confidence or trust we bestow in regulated banks comes at the expense of the wider public: when we lose our deposit due to insolvency, everybody is forced to pay for it by the monetary expansion of the ECB, which covers our loss by printing (or by digitally creating) more euro, and distributes this minted money to the affected bank, allowing withdrawals to resume. This intervention of the ECB dilutes the purchasing power of every unrelated person holding euro, regardless of their country of residence, and regardless on how meticulous they are in choosing a reliable bank. Even the CFA franc in West Africa suffers from this enforced depreciation, being pegged against the euro at a fixed ratio.
Thus, the account holders gain an artificially strong confidence in the bank of their choice, regardless of whichever bank that might be, regardless of how much risk exposures the bank takes, regardless of what financial instruments it edges against, and regardless of the size of its fractional reserve compared to its liabilities. It is an insurance whose only purpose is to allow the bank to take undue risk with volatile instruments and to collectivize any resulting losses against the public, while deluding the account holders with the ancillary excuse that their deposits are safe no matter what.
The alternative to having 21 year old Joe running a million-dollar crypto exchange website from a laptop in his basement is to apply fucking due diligence in choosing our counterparty, and prosecute whenever proper fraud and intentional deception take place.
Regulation is the strongest moat you can have.
The entity that the FCA has acted against is Binance Markets Limited (BML) which the parent Binance Group acquired earlier this year, in part because of its existing registration with the FCA which allowed it to carry out a limited range of regulated activities in the UK.
The FCA has now placed restrictions on BML which remove its ability to carry out those regulated activities -- however BML was not actually doing any business in the UK so the effect of this is limited.
The FCA also issued a consumer warning which, among other other things, reiterated that no entities in Binance Group are registered with the FCA and therefore cannot carry out regulated activity in the UK. Again, the impact of this is limited since the entity that you interact with when using the Binance.com website is not based in the UK, and the FCA does not have jurisdiction over it.
A possibly outcome is that Binance will be a bit more circumspect about offering derivatives trading to UK retail because they want to build a more substantial UK business in the future. We saw this with Bybit a while ago, where they do not allow UK retail to use their website (although they have an exception for sophisticated investors, who can self-certify as an eligible counterparty and continue to trade on Bybit). I wouldn't be surprised to see this.