Binance U.K. is cutting off retail investors from accessing crypto derivatives in order to comply with local regulations, the exchange told its users on Tuesday.
The notice, reviewed by CoinDesk, says U.K. users will be required to provide additional information before they can continue to access futures, margin, leveraged tokens, options and Binance EARN- Dual Investment products on the platform.
This information will help us to determine whether your access to these products is permitted under local regulatory requirements or will be restricted, the notice said.
In June, the U.K. Financial Conduct Authority (FCA) said Binance isn’t allowed to conduct any regulated activity in the jurisdiction. Following the notice, Binance signaled it was working on getting an FCA approval. Earlier this month, the firm’s CEO Changpeng CZ Zhao told the Sunday Telegraph that Binance has hired a number of ex-regulatory staff from the U.K. and a couple of hundred compliance people to bolster efforts to register with the FCA.
The notice was sent directly to users; at publication time, there were no official announcements of the requirement on the firm’s official country Twitter page or website. The firm also did not specify the regulations it is looking to comply with through these new restrictions.
This is a requirement to comply with local regulations, a spokesperson for Binance said in an email to CoinDesk. Binance is committed to full compliance, globally. This is a proactive measure to ensure that our product offering is welcomed by users and local regulators.
Binance users in the U.K. who registered with the platform before Dec. 14, 2021, will have until Feb. 14, 2022, to provide the required information, which will be collected via a pop-up form when attempts are made to access these products, the notice said.
The notice did not specify the information that would be requested but a spokesperson for Binance said there are a number of options available in the declaration form to allow users to most accurately categorize themselves.
One user who goes by Rzulfcut tweeted that the pop-up form asked if he is a private investor. Upon confirming that he was, his access to the aforementioned products was immediately restricted, according to his tweets.
Was expecting a longer journey/more questions so I could stop the process on the last page but nope, it was just one question without any submission confirmation, he tweeted.
Another user, Kongming Riot, tweeted: If you answer this form, you will lose the access immediately. I just filled this form.
Binance did not confirm these immediate restrictions but clarified that restricted access means users will only be able to close, reduce and/or redeem positions.
For derivatives, users can top up their margin balance to prevent margin calls and liquidations. Other products and platform functions on Binance will not be affected, a Binance spokesperson said.