Nikolas Sargeant
Binance has criticized the US crypto crackdown and expressed difficulty conducting business there. The US regulatory authorities have been cracking down on Binance over alleged illegal activity this year. In response, Binance is looking for UK oversight.
Binance, the world’s largest cryptocurrency exchange, is finding it challenging to operate in the US due to a crackdown on crypto. The company's chief strategy officer, Patrick Hillmann, stated that the US regulatory landscape has been confusing over the past six months. Binance is now looking to be regulated in the UK.
Binance co-founder, He Yi Hillmann, commented on the current state of US regulation, citing the SEC action against the rival exchange, Coinbase. Amidst this difficult time for doing business in the US, Binance intends to do all it can to follow UK regulations. Binance had previously experienced difficulties with London regulators after failing to provide basic business information. As a decentralized group with services provided worldwide, Binance lacks a fixed headquarters.
The Financial Conduct Authority ordered the company to cease all regulated activities in Britain in 2021. Last year, a joint venture partner accused the company of filing a "grossly inaccurate" annual report for one of its UK subsidiaries. It is unknown if the company has reapplied to the FCA's registration regime for crypto businesses, which aims to prevent money laundering and terrorism financing. Some groups believe that UK officials have been overly cautious of fintech and crypto companies.
The chief of Revolut, a payments company, pointed out UK regulators' "extra cautious" approach as the reason for delays in obtaining its banking license. Binance, on the other hand, has faced scrutiny from US regulators over purportedly illicit activities this year.
In March, the Commodity Futures Trading Commission filed a lawsuit against Binance. The lawsuit alleged that Binance had been operating illegally in the United States and had extensively solicited US customers. Binance called the complaint "unexpected and disappointing." The Department of Justice also named Binance as a counterparty to Bitzlato, a crypto exchange. The founder of Bitzlato was charged with transmitting millions of illicit crypto funds, which violated US money-laundering regulations.
Binance US recently abandoned a proposed $1bn deal for assets belonging to Voyager Digital, a crypto lender that filed for bankruptcy last year. According to Hillmann, the “broader regulatory pivot we’ve seen in the US” differs from Binance’s talks with the CFTC. While the threat of US enforcement actions on the company and industry exists, Hillmann downplayed it. He believes the US will eventually catch up to Europe, which just passed Mica, a significant step forward in crypto asset regulation.
EU legislation aims to regulate crypto assets in the bloc, providing consumers and market participants greater certainty. Binance enforcement case is among many brought by the US regulators against big companies in the crypto industry. Securities laws violation is the focus of an SEC investigation against the Nasdaq-listed Coinbase. Ripple, a crypto payments company, is engaged in a long-running lawsuit alleging it violated securities laws.
