Binance seeks green light from UK as City minister lays out future for crypto rules
Binance said it would do “everything we possibly can” to be regulated in the UK as the world’s largest crypto exchange hit out at the US’s regulatory environment.
Speaking at the Financial Times’s Crypto and Digital Assets Conference, Binance’s chief strategy officer Patrick Hillmann argued the US “has been very confusing over the past six months”.
Binance has been targeted by both the Commodity Futures Trading Commission and the Department of Justice in recent months for perceived illegal behaviour.
However, Binance has also been targeted by the Financial Conduct Authority (FCA) in the past. Back in 2021 the watchdog argued the firm failed to provide basic information about its business – meaning it was “not capable of being effectively supervised.”
In addition, Binance was accused by the co-owner of a UK subsidiary of filing a “grossly inaccurate” annual report in October last year. Hillman did not confirm whether the company had reapplied to the FCA’s registration regime.
The comments come just weeks after the chief executive of rival crypto exchange Coinbase said it was considering switching its headquarters to the UK.
Brian Armstrong said a move was “on the table” if the regulatory regime in the US did not improve, arguing the US did not have the “regulatory clarity that we need”.
The UK government is proposing to introduce a range of regulations to the crypto system in a bid to become a global centre for the industry. The moves follow on from the EU’s own MiCA regulations.
Although the UK has fallen behind the EU on the implementation of crypto regulations, the government argues its approach will be more “agile” than the EU’s.
Speaking about the UK government’s plans to regulate the crypto sector at the same conference, City minister Andrew Griffith said the proposals were the first step in a broader attempt to “build an economy based on technology and innovation”.
“This is such early days for what is going to be a transformational journey…the big picture is how we go about this very long-term journey,” he said. Griffith argued the government’s crypto regulations form part of a broader strategy including fostering developments in AI and other Web 3.0 tools.
He highlighted the difficulties of balancing innovation and consumer protection. “We’re trying to harness the benefits of that innovation…but also to surface the risks to the consumer…we’re trying to find the right balance along the way with that.”
Although crypto firms have praised the government’s supposed open-minded approach to crypto regulation, the Financial Times reported that more traditional financial bodies have warned of the potential dangers.
The ICAEW, which represents the UK’s chartered accountants, said crypto regulation might cause consumers to underestimate the risks of crypto assets.
“By expanding the parameter and authorising firms for crypto-related activities, consumers might be justified in concluding that the perceived risks that are known about cryptoassets have been to some extent addressed or managed,” they said in a response to the Treasury’s consultation.