The world’s largest cryptocurrency exchange, Binance, has been banned from operating in the UK by the country’s financial watchdog.
The platform, which allows investors to buy and trade cryptocurrencies, is no longer authorized to “undertake any regulated activity” in the UK, the Financial Conduct Authority announced over the weekend.
But despite the crackdown, Britons wishing to buy and sell cryptocurrencies using the platform can still continue to do so.
We explain what your rights are when you withdraw and transfer your money from Binance as a result of the crackdown.
But first, a word of warning: buying cryptocurrencies, like any investment, is a very risky business and making money is never guaranteed.
You need to make sure that you know the risks of investing in cryptocurrencies and that you can afford to lose all the money you invest.
Since cryptocurrencies are very volatile, the value of your investments can go down as well as up in the blink of an eye.
There is also no guarantee that you will be able to convert crypto assets back to cash, as this may depend on demand and supply in the existing market.
As always, never invest in something you don’t understand.
What is Binance?
Binance is a cryptocurrency exchange for trading various cryptocurrencies.
In April, it was the world’s largest bitcoin and altcoin cryptocurrency exchange by volume.
Its users make more than 1.4 million transactions per second, according to its website.
Binance was founded in 2017 by Changpeng Zhao, a Chinese-Canadian developer who previously created high-frequency trading software.
What are my rights to withdraw or transfer money from Binance?
Although the FCA has cracked down on Binance’s trading operations in the UK, that doesn’t mean you can’t use it anymore.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the ban would have “little immediate impact” on Britons looking to buy and sell coins on Binance.
5 risks of crypto investments
The Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Certain investments announcing high returns based on crypto assets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: The high volatility of crypto-asset prices, combined with the difficulties inherent in a reliable valuation of crypto-assets, puts consumers at high risk of loss.
- Product complexity: The complexity of some crypto-asset related products and services can make it difficult for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back to cash. The conversion of a crypto-asset into cash depends on the existing demand and supply in the market.
- Costs and fees: Consumers should consider the impact of fees and charges on their investment, which may be higher than those of regulated investment products.
- Promotional material: Companies may overestimate product returns or underestimate the risks involved.
But she said the ban should signal a “red flag” to investors looking to inject their money into the crypto market.
If you’re having trouble depositing – or withdrawing – your money, you have little protection if something goes wrong.
Since cryptocurrencies are not regulated in the UK, your rights are limited if you have any problems.
It is unlikely that you will be able to file your complaint with the Financial Ombudsman Service if you are having problems getting your money back.
You are also unlikely to be protected by the Financial Services Compensation Scheme (FSCS), which covers up to £ 85,000 of your savings if a business goes bankrupt.
Britons have previously struggled to withdraw and deposit money into their Binance accounts, according to reports from the Financial Time.
Binance said its platform for adding or removing pounds had been “suspended for maintenance” and the British had been barred from making such transactions.
The FCA is not alone in cracking down on cryptocurrency exchange platforms.
Banking giant Natwest Group has capped the daily amount Britons can send to these sites, including Binance.
The maximum amount you can donate varies by platform, but a Natwest spokesperson said it could reach thousands of pounds.
What are the risks of using Binance?
Using any cryptocurrency exchange, including Binance, to invest in coins is risky.
The FCA has previously warned Britons that they should be prepared to “lose all their money” if they choose to put money into cryptocurrencies.
It revealed that 2.3 million people in the UK now own crypto assets, but only around a third (38%) consider investing a gamble, despite experts warning of the dangers of doing so.
AJ Bell financial analyst Laith Khalaf said Britons should think carefully before putting savings in pieces.
“Cryptocurrencies are incredibly volatile and may not last long, so buying them is risky business.
“Also, this is a really new market, and therefore companies and exchanges operating in this area do not have the same levels of oversight and governance as the London Stock Exchange, for example, which has been around since over 300 years. “
The Sun approached Binance for comment.
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