Binance has moved to restrict UK customers’ access to crypto derivatives after its chief executive said the exchange plans to extend its push for regulatory approval to operate. in this country.
The cryptocurrency exchange, which came into conflict with the Financial Conduct Authority earlier this year, sent notices to UK customers on Tuesday asking them to provide additional information in order to continue to access the services. derivatives and other features on the platform.
The FCA this year banned the offering of crypto derivatives to retail investors. But global exchanges like Binance can still offer these services to UK customers through overseas websites, despite a ban by a national watchdog.
“To enable us to comply with UK financial regulations, we require you to do so. . . provide additional information,” Binance announced to customers, first reported by Coindesk.
“This information will help us determine if you have access to [certain] Products are allowed according to local regulatory requirements or will be restricted. ”
According to the announcement, UK customers who signed up on Binance before December 14 must answer questions to determine if they can maintain access to derivatives products.
A copy of the user questionnaire, provided by a Binance user, asked users to report whether they were wealthy, overseas, or professional traders. Sophisticated traders can still use crypto derivatives under UK rules. But the exchange said “most customers” will not fall into those categories.
The limits on its offering mark Binance’s latest concession after a year of constant pressure from regulators in jurisdictions around the world.
The message mentions futures, options, and some other leveraged products as services that may be restricted.
Binance confirmed the message was sent. “This is a requirement to comply with local regulations. Binance is committed to full compliance globally,” the team said.
Derivatives products and activities that lend money to users to amplify their trades have at the center of some managers’ concerns via Binance and other crypto exchanges, as these speculative strategies can quickly lead to severe losses for retail investors. They also add to broader market volatility, industry executives To speak.
Binance CEO Changpeng Zhao earlier this month told the Daily Telegraph that the company planned to re-apply for FCA licensing to operate as a crypto company in the UK. The regulator in June ordered Binance to stop all regulated operations in the country and impose strict requirements in a high profile. “Consumer Warning”.
Binance Markets Limited, one of the exchange’s UK affiliates, withdrew its application to the FCA prior to the warning.
The exchange has sought to establish crypto operations in a number of financial centers but has faced strong opposition from regulators due to questions about the group’s policies and procedures to protect its assets. consumer protection. The exchange on Monday said will close its crypto exchange in Singapore and withdrew its regulatory application in the city state, after being reprimanded by the local regulator in September.
Cryptocurrency investors in multiple jurisdictions can access Binance’s offshore exchange, which offers spot and derivatives trading, and other services, even when the team is inactive. operate in their country of residence. However, the group has set up branches around the world to get better access to traditional payment networks.
In July, the exchange announced that it would “take down” its lucrative derivatives business in Europe, where it also faces regulatory scrutiny and a reduction in the amount that exchanges Retail traders can borrow on the platform to amplify their bets.