Government regulators in the UK have started to crack down on Binance, the world’s largest cryptocurrency platform by volume, with some news outlets like the BBC going so far as to call it a “ban.” But Binance says it’s not a ban and won’t affect anything the company does in the UK. How can that be the case? Binance owns a number of different companies around the world, and British regulators have only placed limitations on a single Binance-affiliated corporation in England known as Binance Markets Limited.
“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,” the UK’s Financial Conduct Authority said in a statement published online over the weekend.
But Binance says this decision doesn’t really change how they operate.
“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,” Jessica Jung from Binance’s PR division told Gizmodo via email. “The Binance Group acquired BML May 2020 and has not yet launched its UK business or used its FCA regulatory permissions.”
The Financial Conduct Authority would not comment on the record to Gizmodo but emailed a confusing background document that outlined the difference between Binance Markets Limited, the UK-based entity being sanctioned, and Binance’s global operations, which can still do business in the UK because cryptocurrencies aren’t regulated in the country.
Binance is based in the Cayman Islands and is reportedly under investigation in the U.S. by the Department of Justice and the IRS, though the company has tried to suggest that’s not the case.
Where does all of this leave Binance’s operations in the UK? Firmly within a gray area, as best as we can tell—the space that crypto operates best.
Paul Amery from the New Money Review has dug into the public records, including Binance’s purchase of EddieUK. Binance changed the name of that company to Binance Markets Limited—the corporation that UK regulators are trying to stop from operating in Britain. And Binance appears to have registered at least five other companies in the UK:
Together with Binance Markets Limited, there are six companies with ‘Binance’ in their name on the UK Companies House register.
As EddieUK, Binance Markets Limited was incorporated in 2015.
But the other five—Binance Limited, Binance Ltd, Binance Coinbase Limited, Binance Digital Limited and Binance Europe Ltd—were set up between 2019 and 2021.
None of these five has published financial accounts. Binance Markets Limited—in its previous existence as EddieUK—has done so.
But for the latest financial year on file, ending March 2020, its turnover came to a paltry £2500, far short of the sums one might expect for a cryptocurrency exchange that earlier this year reported $80bn of trading volume in one day.
Confused yet? No one can really blame you. It’s exhausting trying to keep up with how cryptocurrency players are shuffling money, let alone companies, around the world in an effort to stay a few steps ahead of regulators.