The Crypto wild wars have not ended. The Clampdown of Cryptocurrency mining and activities has spiraled out of control. Crypto exchanges are not spared too. So, Binance, one of the crypto space’s leading exchanges, is getting the fiercest hit. The Uk has joined a long list of other countries that are not backing down on strict (AML/KYC) regulations for crypto exchanges.
· Cryptocurrencies and Exchanges battle regulation policies from different Governments.
· UK joins five other countries to ban Binance of regulatory policies.
· Binance Uk Ban and the search for a permanent international Headquarters.
The Forked Policy of Money Laundering
“Binance Markets Limited is not permitted to undertake any regulated activity in the UK. This firm is part of a wider Group (Binance Group). Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. No other entity in the Binance Group holds any form of UK authorization, registration or license to conduct a regulated activity in the UK.”
This is coming weeks after the FCA released an earlier statement that a very high number of businesses are not meeting the required standards under the Money Laundering Regulations.
Consequently, The FCA has only registered 9 Cryptoasset firms as of 23 July. The others are operating on the Temporary Registration Regime (TRR). The provision of TRR will last until 31st March 2022, after which the FCA will revoke the licenses.
Binance and the Search for Green Candlesticks
Binance has been migrating from one country to another in search of a permanent headquarters. But that cannot happen without strong regulation or legislation. They are currently operating from Cayman Island. However, their future is uncertain, for they might move again over policy resentment.
Many regulatory agencies of different countries are mounting pressure on Binance. Most of these agencies cite compliance issues as the problem they have with the exchange. All had also reiterated that most Crypto exchanges are not operating with a license. Hence, they are not authorized to carry out operations in their countries.
Beyond the narrative of attacking Binance, Cryptocurrency Globally had also faced heated opposition by Governments. Most countries are either trying to create a Central Bank Digital Currency (CBDC) or are protecting their citizens from making wrong financial decisions. China is leading in this crackdown as most crypto Miners left the country for a more favorable crypto environment.
Why Regulation is Not so Simple
There is division in the crypto community between those who argue for regulations, and those who are anti-regulations. For the latter, regulation goes against the Satoshi vision; a vision that Governments should not control Cryptos. Those who are for regulation argue it’s a form of anti-money laundering framework to checkmate the excesses of international crime.
Many countries’ financial regulations and policies differ. But the question remains:
What is it about these regulatory policies that make many exchanges uncomfortable in accepting them? Is it fair? Does it mitigate the advancement or growth of cryptocurrencies?
Recently, Brian Armstrong, the CEO of Coinbase (the direct competitor of Binance) in a series of tweets called on crypto users to persuade their Senators to reject the new crypto policy in the United States that added a surveillance clause to the law.
Brian argued that these policies are a disaster for both the industry and the United States. This is because Miners, exchanges, and top crypto Stakeholders will move out of the US to other countries where conditions will be favorable. If Coinbase, which has a good history of working with the government, is complaining about stringent policies, then Binance may have a point.
Is it the End for Binance?
Binance has a large market base, and currently controls 23% of the global crypto market. They are by far, the leading global exchange of crypto assets by market cap. They lead by a 24hrs trading volume of $24 billion according to Coinmarketcap ranking.
Binance is not ready to relinquish that enormous amount of power, at least not to any government regulations. Many Binance customers always boycott their government policies and still patronize the exchange. This is because it’s beyond the exchange, but about the idea of owning a Cryptocurrency. Binance is playing the global power game that may end it or make it stronger.
These movements and crackdowns affected the movement of Bitcoin. It went from $63,000 its ATH in April, to half that price in July. BNB, which is the native coin of Binance also went from $662 in May to $269 in July.
But this is not the end of Binance as they continue to push their platform to remain at the top. As they offer more and more services, it will be difficult for the crypto community to let them go. For many, they perform, and that is enough. However, if these doors keep shutting on the exchange, then they will be headed towards a sloppy cliff from which they may never come out.