Home Cryptocurrency Binance Begins Restricting Platform Access as the OSC, FSA, and FCA Issue Warnings

Binance Begins Restricting Platform Access as the OSC, FSA, and FCA Issue Warnings

by Gordon James

The Binance cryptocurrency exchange has begun to restrict access to some of its services in response to separate warnings from the OSC, FSA, and FCA. These agencies have all issued warnings to the OmiseGo team, recommending that the platform should be taken offline. The exchanges are likely taking action in response to the recent SEC’s decision to reject the exchange’s plans to list the OmiseGo token. Additionally, the agency warned that public interest in ICOs is a concern and informed the industry that there is no regulatory requirement for an exchange to list tokens. These warnings have resulted in a number of exchanges disabling services to OmiseGo (OMG), citing concerns with the platform’s safety and security.

Binance, one of the largest cryptocurrency exchanges by trading volume, has announced that it will begin to significantly restrict the number of new user registrations for its exchange. The move comes following an announcement by the OSC, FCA, and FSA that all cryptocurrency exchanges should continue to fully comply with KYC and AML regulations.

Binance, one of the world’s largest exchanges for digital assets, just had a tumultuous weekend. Regulators have publicly condemned the company for its actions.  In some cases it was only a warning to the public, in others a total ban.

Difficult weekend for Binance

Given the growing popularity of digital assets over the past year, it’s no surprise that global regulators are paying increasing attention to service providers in the sector – including Binance.

It is assumed that these regulatory actions in each of the cases below were primarily triggered by Binance’s decision to support various derivatives on its platform, an asset type that requires a specific license.  Examples of these derivatives are futures contracts and tokenized stocks, which are traditional securities.

In addition to offering such assets, various regulators are imposing stricter requirements on exchanges to demonstrate adequate anti-money laundering (AML) protection.  Only a few companies have decided to take this step – Binance is not yet one of them.


In spring 2021, the Ontario Securities Commission (OSC) set a deadline for digital asset providers to register with the regulator.  Over time, it became apparent that few of these companies met this requirement – the result? KuCoin, ByBit and Poloniex have been banned from offering their services to customers living in Canada’s most populous province.

Given this trend, Binance seems to have taken a proactive step by limiting its services to the same population – no doubt anticipating a similar ban on the OSC’s horizon.

Binance spoke to its customers, called binanciers, and explained,

As part of our ongoing compliance efforts, Binance has updated its Terms of Service to announce that Ontario, Canada has become a limited jurisdiction, effective 6/26/2021…. Binance can no longer serve users in Ontario.

If the move was indeed the result of listing assets such as tokenized shares, then it stands to reason that other platforms doing the same (such as Bittrex) would soon announce similar moves.

Currently, these Canadian restrictions only apply to the province of Ontario and not yet to other provinces and territories in Canada.


The Financial Conduct Authority (FCA) has banned the sale of cryptocurrency derivatives and exchange-traded notes (ETNs) to UK resident retail investors from 6. January 2021 banned.

A recent communication from the regulator now draws attention to Binance Markets Limited (a subsidiary of Binance Group) and states that it is not currently authorised to operate in the UK.  Although it is not entirely clear, it is believed that this decision was taken because of the violation of the above-mentioned restrictions imposed on derivatives and ETNs a few months ago.

This particular situation is worth noting because the true impact of the FCA is not clear.  Although the regulator issued a public notice specifically about Binance.com, the company itself denied any connection to its main platform with the statement in a series of tweets,

We have seen reports of a notice issued by the UK FCA in relation to Binance Markets Limited (BML).  BML is a separate legal entity and does not offer any products or services through Binance.com.

Binance Group acquired BML in May 2020 and has not yet launched its UK operations or received FCA approval.  For questions about the LBM, please contact [email protected]

The FCA UK’s notification has no direct impact on the services offered on Binance.com.  Our relationship with our users has not changed.

We work with regulators and take our compliance obligations very seriously.  We actively monitor policy, regulatory and legislative developments in this new area.

At the time of writing, the FCA has yet to provide further clarification, leaving many wondering who and what services will be affected.


While confusion may remain over the actual actions between Binance and the FCA, the situation in Japan is a bit clearer.  A few days ago, the country’s Financial Services Authority (FSA) issued a second warning to Binance, referring to its previous call in 2018.

In any case, Binance and the public were warned that the company was not authorized to operate in Japan.  However, the company has stated in the past that it does not operate in Japan.  This makes the warning particularly interesting, as it makes sense for the FSA to believe that Japanese citizens are finding ways to indirectly access Binance services.

Decentralised exchanges win ?

If one thing is clear from the above examples, it is that centralized exchanges must adapt or die.  Changes happen fast and require more control by these companies.  If not, operators will begin to move to decentralized exchanges, a transition that is already taking place among the technically savvy.

The reason for this transition is the structure of a truly decentralized exchange.  This structuring includes the elimination of companies like Binance, which allow traders to buy/sell assets in a direct, peer-to-peer manner.  These offerings cannot be regulated as easily as their centralized counterparts, since there is no company or person against whom enforcement action can be taken.

Market response

Interestingly, despite the increased focus on Binance, cryptocurrency markets have shown a modest recovery over the past 48 hours.  At the time of writing, BTC has reached $34,300 and this bullish move has also broken the trend of weekend dips.

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