Binance is the latest big-ticket cryptocurrency firm to pivot away from the US market due to a punishing regulatory environment that saw Nasdaq-listed rival Coinbase establish a presence in the crypto-friendly offshore jurisdiction of Bermuda in recent weeks.
Speaking at a Financial Times summit on Wednesday, Patrick Hillman, Binance’s chief strategy officer, said the harsh and seemingly arbitrary enforcement actions taken by US regulatory the Securities and Exchange Commission were making it “very difficult” to do business in the country.
But the US’s antagonistic stance could be a significant opportunity for the UK’s burgeoning cryptocurrency sector.
Hillman stated that Binance would do “everything we possibly can” to gain regulatory recognition in Britain, where prime minister Rishi Sunak has taken strides in promoting the country’s crypto credentials.
Sunak, who has long touted Britain’s potential as a “global crypto hub”, launched a consultation in February on how to regulate the sector while remaining open to innovation, though there are questions over decentralised finance, compensation and stablecoin issues.
Binance’s bullish comments on Britain lead to another question: Could the world’s largest cryptocurrency exchange be eyeing up a flotation on the London Srock Exchange?
Binance’s US entity has been mulling an IPO for years, but there is little chance of US regulators given the green light.
Conversely, London policymakers are in the process of simplifying standard and premium listing rules in order to attract foreign interest to the City’s flailing capital markets.
Binance has not made any statements on the prospect of a London IPO, though Proactive has reached out for a comment.
Former Chancellor George Osborne, who recently charmed Coinbase head Brian Armstrong at April’s Innovate Finance Global Summit, so perhaps he could lend his charms to Binance too.
A steep hill to climb
Binance has a wrought history with the UK financial watchdog, despite Hillman’s optimistic comments on the UK regulatory environment
Back In 2021, the FCA ordered Binance to cease all operations in the country and to this day, the exchange is not authorised to carry out regulated activities without written consent.
Regardless, Hillman told the Evening Standard that the regulator is “taking a very reasonable, rational approach to the industry right now”.
Binance will face another significant hurdle in establishing UK operations.
Essentially all of the major UK-based financial institutions have imposed draconian rules on fiat-to-crypto on-ramps i.e. digital asset exchanges such as Binance.
In November 2022, Banco Santander (LSE:BNC) limited payments to crypto exchanges to £1,000 per transaction, with a total limit of £3,000 in a 30-day period.
Real-time payments to crypto exchanges will be banned by the Spanish bank at some point this year.
In that same month, NatWest began refusing to serve business customers who accept payment in cryptocurrencies, including bitcoin.
Nationwide Building Society implemented restrictions on its customers' ability to purchase cryptocurrencies from March this year, while HSBC has similar restrictions in place.