Binance pledges to do everything to operate in the UK
The legal battle between the US and cryptocurrency exchanges has made Binance question the legal environment in the country. Patrick Hillman, Binance’s Director of Strategy, commented that the lack of clear regulations and the unclear legal situation in the US has made doing business more difficult. He also referred to the ongoing legal battle between Coinbase and the US Securities and Exchange Commission (SEC).
Hillman pointed out that the SEC’s allegations against rival exchange Coinbase are a sign of “how strange the US is becoming.” On March 22, Coinbase revealed that it had received a warning letter from the SEC for violating federal securities laws. Some of the exchange’s important services, such as Coinbase Earn, Coinbase Prime, Coinbase Wallet, and immediate trading, are expected to be affected.
In response, Coinbase filed a petition requesting that the SEC answer the company’s questions from 2022. The court ruled that the SEC must respond to Coinbase’s lawsuit within 10 days. While criticizing the SEC for lack of transparency, Coinbase affirmed that it still considers the US an important market and hopes that regulators will make positive changes.
Speaking at the Financial Times crypto summit, Hillman said that Binance will do “everything” it can to be regulated in the UK after the US challenges. At the beginning of May, Binance considered expanding its operations in the UK after the country’s government announced its desire to become a “competitive location for sustainable finance.”
According to Binance, the exchange will support the expansion of certain cryptocurrency investments. “Confirming formal regulations, along with better market supervision and management, will reduce bad actors,” Binance founder CZ wrote on Twitter. In 2021, Binance’s subsidiary Binance Markets Limited was banned from operating by the UK Financial Conduct Authority (FCA). In 2022, a joint venture partner said that the company had filed an “inaccurate” annual report for one of its subsidiaries in the UK.
Last week #Binance responded to the UK HM Treasury’s consultation on the ‘future financial services regulatory regime for cryptoassets’.
Always good to see policy makers openly seek input and suggestions.
Quick thread about our response.
— CZ 🔶 Binance (@cz_binance) May 2, 2023
In early February of this year, CZ said he was happy with the progress of regulations in the UK. Hillman declined to confirm whether the company has re-registered with the FCA for cryptocurrency businesses, including the necessary procedures to prevent money laundering and terrorist financing.
In the US, Binance has been sued by the Commodity Futures Trading Commission (CFTC) since March. The regulatory agency accuses the exchange of intentionally violating US law. “For years, Binance has known they were violating CFTC rules. They have tried to keep their pockets full and avoid regulatory scrutiny at the expense of American traders,” said acting CFTC chairman Rostin Behnam.
In response to the lawsuit, Binance issued a statement saying that it does not operate in the United States and does not accept users from the country. However, the CFTC argues that Binance has still allowed U.S. residents to trade on its platform by not implementing proper measures to block them.
This is not the first time Binance has faced regulatory issues. In recent months, the exchange has been the subject of scrutiny from authorities in the UK, Japan, Thailand, and Germany, among others. Some countries have even gone so far as to ban Binance altogether.
Binance has stated that it is committed to complying with all applicable laws and regulations, and has hired former U.S. Senator Max Baucus to advise the company on regulatory and policy issues in the United States.
Despite the regulatory hurdles, Binance remains one of the largest cryptocurrency exchanges in the world by trading volume, with a reported $2 trillion in volume in the first quarter of 2021.
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