Ban On Binance Exchange: Loads of Binance Sanctions signs for the end?

binance exchange ban

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Binance Exchange and its Bag Loads of Sanctions: A Sign of the End?

Binance is a leading crypto exchange that provides a platform for crypto traders to access and trade over 500 digital assets. Since its inception in 2017, Binance has enjoyed significant growth and is currently available for crypto traders in over 150 countries.
The acceptance and use of this crypto platform by crypto traders across the globe have attracted unwanted attention from authorities in many countries. This attention has resulted in several investigations and sanctions by governments aimed at controlling or stopping the activities of Binance within their territories.
Successive sanctions by authorities in different countries have raised many questions regarding the future of Binance in these countries. However, in a move to calm the fears of its users, Binance CEO Changpeng Zhao (CZ) released an open letter to Binance users.
In the letter, the CEO carefully explained some of the steps the exchange intends to take to stop sanctions for regulatory authorities across the globe. Additionally, Binance has announced plans to significantly increase the size of its global compliance team before the end of the year. In this move, we will see Binance engage with regulatory authorities on ways to comply with governmental regulations.
Many crypto enthusiasts have come forward with different ways for this crypto exchange to overcome governmental sanctions. One commonly discussed solution by crypto enthusiasts aims to entirely shift Binance from its operations as a centralized exchange to become a fully decentralized exchange.
However, before we discuss this possibility and its advantages, let us look at the growth of Binance within the past year. Additionally, we will review some of the recent regulations that have been placed on this crypto exchange.

The Growth of Binance From 2020 - 2021

Binance has experienced a significant increase in trading volume within the past twelve months. A look at the statistical data from Cryptocompare revealed that Binance trading volumes hit $662 billion in June 2021. Compared with trading volumes in 2020, this crypto exchange has seen its trading volume increase by 10x.
Binance Exchange Ban
In terms of its daily trading volume, Binance has exceeded expectations in 2021. The highest trading volume recorded over 24 hours in 2020 was $28.58 billion. The 2021 high was repeatedly broken in 2021, with the highest trading volume on Binance hitting $160.95 billion on May 19, 2021.
This significant increase in trading volume indicates a general acceptance and use of the exchange by crypto traders across the globe. However, this growth has attracted attention from many financial regulatory organizations. Many of these regulatory authorities have issued sanctions against the activities of Binance. Let review some of these sanctions.

Recent Sanctions Against Binance

Binance recent regulatory problems began on June 25, 2021, when regulators at the Japanese Financial Services Agency (FSA) released a statement about Binance. In the report, regulators claimed that Binance was licensed and registered in Japan. As a result, the crypto exchange was not authorized to operate in Japan.
Shortly after that, Binance announced that it was leaving Canada’s Province, Ontario. The crypto exchange cited regulatory concerns for the move.
On June 26, the Financial Conduct Authority in the United Kingdom announced sanctions against Binance. In its report, regulators at the Financial Conduct Authority stated that Binance “was not permitted to undertake any regulated activity in the United Kingdom.” The report further states that Binance was required to receive consent from FCA before conducting any business in the UK.
In response to this sanction, many banks in the United Kingdom have stopped supporting transactions involving Binance. Prominent among these banks is the UK’s third-largest bank, Barclays. Binance users in the United Kingdom can not send funds from their Binance accounts directly to their bank accounts due to this sanction.
Within a week, Binance was faced with more sanctions from Thailand’s Securities and Exchange Commission. In a notice released on July 2, the regulatory body stated that Binance was illegally operating without a license in the country.
The report further stated that the crypto exchange needed to obtain a license for any trading activities within the country. The Thai SEC had issued a similar statement during April 2021. However, at that time, Binance had failed to respond or comply with the demands.
By July 6, Binance announced that its platform would no longer support EU SEPA bank transfers citing “events beyond our control” as a reason for the decision. This decision may be because Binance is not currently licensed by the Cayman Islands Monetary Authority (CIMA). The Cayman Islands Monetary Authority (CIMA) is a financial regulatory body that oversees economic activities for countries in the cayman islands.
On July 15, Italy’s financial regulator, CONSOB issued a public warning about Binance. In its statement, the financial regulator stated that Binance was not licensed and registered in the country.
Additionally, the regulator urged users of the platform in their countries to adopt the utmost caution when trading cryptocurrencies. Public warnings and sanctions against Binance are likely to continue well into the future. Currently, regulators are already investigating the exchange for illicit activities like money laundering and tax evasion.

Binance as a Decentralized Exchange

As earlier stated, a possible solution to prevent continuous sanctions against Binance will be to change the exchange’s mode of operations from a centralized exchange to become a fully decentralized exchange. This move will see Binance relinquish its roles as the middleman in crypto transactions. Additionally, it will allow for direct trading between crypto traders on its decentralized platform.
Binance Exchange Ban
Binance will still be required to register and license its activities in many countries as a fully decentralized exchange. However, it would relinquish its responsibility as a central figure that controls the activities of traders on its platform. Instead, the platform will be operated by preset smart contracts that will regulate all activities on the crypto platform.
Currently, the Binance centralized exchange acts as a middleman for crypto exchange on its platform. In that role, Binance holds digital assets on behalf of its users and helps to complete transactions for its users. However, a fully decentralized version of the exchange will allow traders to have full authority over their assets.
There is a long list of benefits attached to operating a fully decentralized platform. For example, users of the Binance platform will have full control of their private keys or other sensitive data. As a result, transactions can not commence without the authorization of a user. Additionally, there will be little downtime on the exchange since it is not under the control of a central server.
Currently, Binance offers users a chance to trade on its Binance DEX platform. However, the main exchange remains centralized. We expect to see several steps by Binance to prevent further sanctions from regulatory authorities. Some of which will include compliance with laws prescribed by regulatory authorities. However, we believe that as a fully decentralized exchange, Binance will be in a better position to deal with more sanctions from regulatory authorities across the globe.

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