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4000 GBP Rise in Bitcoin Price – Binance Exchange Ban in the UK

Bitcoin
Published on Jun 30, 2021

4000 GBP Rise in Bitcoin Price – Binance Exchange Ban in the UK

The cryptocurrency market capital in the UK alone amounts to billions of US Dollars. The largest share of these currencies is held by the giant Bitcoin and Ethereum. Bitcoin alone is worth 660.489 billion USD (TradingView), and Etherium is positioned on the second rank, valuing at 251.245 billion USD.  

Looking at the speed at which cryptocurrency is growing in the UK, the finance regulators of the country, the Financial Conduct Authority (FCA) looked at the risks that come with it, and decided to ban the biggest cryptocurrency exchange in the world – Binance

What are the reasons behind this ban? What are the crypto exchanges? And does the ban make a difference? 

Bitcoin and Etherium

The Ban of Binance in UK

The Financial Conduct Authority (FCA) declared on June 25 that all regulated activities performed by Binance in the UK were banned, except those that could be conducted with special permissions given by the FCA, effective immediately.  

The ban came a month after Binance themselves withdrew their application to register with the FCA as an official exchange. FCA warned users of the high risk that was involved in dealing with unregistered exchanges like Binance and the general hazards of dealing with cryptocurrency. 

Binance has come into global scrutiny recently, and countries like China have also banned the platform regarding safety and money laundering concerns. Before going into detail about the reasons behind this ban and why exchanges like Binance are getting globally scrutinized, let’s first understand what a cryptocurrency exchange is and what it does. 

What is a Cryptocurrency Exchange?

To put it simply, a cryptocurrency exchange acts as the mediator between the buyer and seller of cryptocurrency. The exchange can facilitate trade between the following: 

  • Money to the cryptocurrency of equivalent value 
  • Cryptocurrency to the money of equivalent value 
  • The exchange between cryptocurrencies, for example, trade between $100 worth of Bitcoin for $100 worth of Ethereum 

The same concept can be applied to different assets that a cryptocurrency exchange facilitates trades in as well. Some of the exchanges a crypto exchange is responsible for are exchanges between other forms of digital currencies and fiat currencies. 

Cryptocurrency exchange

Types of Cryptocurrency Exchanges 

Essentially, there are two main types of cryptocurrency exchanges present in the world today. They can either be centralized exchanges or decentralized exchanges. 

What are centralized cryptocurrency exchanges? 

Centralized exchanges for cryptocurrency act as an intermediary between the buyer and seller. They operate more or less like any other stock exchange in the world. Centralized exchanges are considered to be more reliable than their counterparts because there is only one company that manages the facilitation of trade between both parties. This means that the operation and control of all the trades is conducted by a single company, making it more reliable than its counterpart.  

Binance is the world’s biggest centralized cryptocurrency exchange, with an exchange score of 9.9 (CoinMarketCap)  today. Most cryptocurrency exchanges are centralized exchanges, and nearly all transactions that take place happen through them. Users prefer centralized exchanges over decentralized ones because they are a more familiar concept in terms of trading structure, and since they are more reliable than decentralized sources, it offers them a higher sense of security with their trades. 

What are decentralized cryptocurrency exchanges? 

Decentralized cryptocurrency exchanges offer users direct transactions. There is no intermediary or third party present to monitor or facilitate the transaction. It is considered to be a peer-to-peer mode of transaction. This may seem like an easier option, but most users don’t find it very trustworthy or convenient.  

Decentralized exchanges do not offer trading between fiat currencies and digital ones, which makes it impossible for those who don’t already own cryptocurrency to trade. The decentralized mode of trading is also a lot more complex and tougher to navigate, and if the users mess up, their digital assets could be lost forever. This is why most users prefer paying the hefty transaction fees to the centralized crypto exchanges in exchange for the security and reliability of their digital currencies. 

Read Also: Could ‘Stablecoin’ Save the Future of Digital Currency? 

Data analytics services could help offer a more structured option for investment opportunities so that all users can make smart investments and avoid unprecedented losses. They can choose to opt with centralized crypto exchanges and use their generated insights to make better financial decisions. 

Best Cryptocurrency Exchanges, as of 2021

Here is a list of the most popular, widely used, and most trustworthy cryptocurrency exchanges this year, offered by Forbes

  • Binance.US 
  • Coinbase 
  • Kraken 
  • Crypto.com
  • Gemini 
  • Gate.io 
  • KuCoin 
  • Bitstamp 
  • Bittrex
  • bitFlyer 

Crypto Trading

The Risks of Dealing with Cryptocurrency Exchanges 

FCA emphasized greatly on the risks that come with dealing with unregistered cryptocurrency exchanges when they imposed a ban of regulatory activity on Binance. They said that the biggest risk was to the citizen’s assets and that the digital currency could be used for many illegal activities such as money laundering or trading of illicit and illegal objects and substances.  

So what are the biggest risks that come with dealing in cryptocurrencies in general? And should cryptocurrency exchanges be facing the brunt of them? 

Risks Involved when Dealing with Cryptocurrencies 

The biggest risks involved with dealing in cryptocurrency does not lie within the trade itself, but in fact the source and reasons behind this trade. Some of the causes of concern that were raised by many governments, organizations and individuals alike, with regards to cryptocurrency trading include the following: 

  • Increased Anonymity Can Promote Illegal Activity 

Trading of virtual assets via cryptocurrency exchanges can promote illegal activity because, essentially, the entire process is anonymous. You do not know who you are buying from or selling to. Criminals can find this anonymity enticing for conducting illegal trade because of the highly protected identity status that comes with trading in digital currencies. Activities such as money laundering become a lot easier to conduct. 

  • Beyond the Laws of Jurisdiction 

Since the crypto trading world is an anonymous, global phenomenon, it defies the laws of the jurisdiction. Unless the exchange is registered on a government’s financial regulator board, all activities conducted do not follow any rules or laws of any kind.  

  • Type, Volume and Frequency of Transactions 

The biggest concern, as stated by FCA, was also related to the type and volume of transactions conducted on these crypto exchanges and what it could mean translated into the real economy.  

There could be large chunks of digital currencies being exchanged across the world, which could be sourced illegally. More frequent trading in large numbers could also create the possibility of illegal trading.  

The reasons behind the large volume of trading still remains unknown, which could breed and increase terrorist activity. Terrorists can easily exchange their digital currencies for arms and ammunition, and since there is no form of regulation imposed upon the users, there is no form of control over what the virtual assets could be funding. 

Bitcoin price rise

Should Cryptocurrency Exchanges be Held Liable for the Risks and Register to Become Regulated? 

While the threats posed by cryptocurrencies are real, the cryptocurrency exchanges are being held inherently implicit for the actions of their users. By providing the criminals with a platform for conducting illegal trading and transactions, they are also becoming liable for the same.  

The biggest reason why FCA claims Binance withdrew its application for FCA registration was that it did not comply with the money laundering laws of the UK government. While this may be a cause for concern, it has not affected the crypto market as much. As of today, 1 Bitcoin is worth 25,434.55 GBP (BullionByPost), which rose by 4,000 GBP since the drop after FCA announced the ban on Binance.  

Market research services are crucial in analyzing trends and exchanges in cryptocurrencies and the financial status of the global market in general. They offer data-driven insight on the current state and give researched and insightful predictions for the future trends so that users can make successful trades in digital currencies or otherwise. 

The Ban on Binance in the UK

What Does Binance Have to Say About the Ban? 

Even though Binance is being probed by multiple countries, having been fined heavily by Japan for not meeting regulations, the cryptocurrency exchange does not seem too concerned by this, and neither does the public. Crypto bulls claim that the intensive probing is a sign of the crypto market maturing and that there are only positive growth prospects for the industry from hereon. 

Their response to the ban was that they are taking a “collaborative approach in working with regulators” and that they are working towards “furthering the security and sustainability in the industry while providing the best services and protection to our users”.


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