How to withdraw and transfer money and cryptocurrency from Binance after UK ban – your rights explained
THE world’s biggest cryptocurrency exchange, Binance, has been banned from operating in the UK by the country’s financial watchdog.
The platform, which allows investors to buy and trade cryptocurrencies, is no longer allowed to “undertake any regulated activity” in the UK, the Financial Conduct Authority announced this weekend.
But despite the crackdown, Brits wishing to buy and sell cryptocurrencies using the platform can still continue to do so.
We explain what your rights are when withdrawing and transferring your money from Binance following the crackdown.
But first, a word of warning: buying cryptocurrencies, like any investment, is a very risky business and making money is never guaranteed.
You should make sure you know the risks of investing in cryptocurrencies and that you can afford to lose any money you put in.
Cryptocurrencies are highly volatile, so the value of your investments can go down as well as up in the blink of an eye.
There is also no guarantee that you can convert crypto assests back into cash, as it may depend on the demand and supply in the existing market.
As always, never invest in something you don't understand.
What is Binance?
Binance is a cryptocurrency exchange platform for trading various cryptocurrencies.
As of April, it was the world's biggest bitcoin and altcoin crypto exchange by volume.
Its users complete more than 1.4million transactions per second, according to its website.
Binance was founded in 2017 by Changpeng Zhao, a Chinese-Canadian developer who had previously created high frequency trading software.
What are my rights withdrawing or transferring money from Binance?
Although the FCA has cracked down on Binance’s business operations in the UK, it doesn’t mean you can’t use it anymore.
Hargreaves Lansdown senior investment and markets analyst Susannah Streeter said the ban will have “little immediate impact” on Brits looking to buy and sell coins on Binance.
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
But she did say that the ban should signal a “red flag” to investors looking to pump their cash into the crypto market.
If you have problems depositing – or withdrawing – your cash, you have little protection if something goes wrong.
Because cryptocurrencies are unregulated in the UK, your rights are limited if you run into problems.
You’re unlikely to be able to take your complaint to the Financial Ombudsman Service if you have problems getting your cash back.
You are also unlikely to be protected by the Financial Services Compensation Scheme (FSCS), which covers up to £85,000 of your savings if a firm goes bust.
Brits have already been having trouble withdrawing and depositing money into their Binance accounts, according to reports from the Financial Times.
Binance has said that its platform for adding or removing sterling had been “suspended for maintenance”, and Brits had been blocked from making such transactions.
The FCA isn’t the only one cracking down on cryptocurrency exchange platforms.
Banking giant Natwest Group has capped the daily amount that Brits can send to these sites, including Binance.
The maximum amount you can put in varies from platform to platform, but a Natwest spokesperson said that it could be up to thousands of pounds.
What are the risks of using Binance?
Using any cryptocurrency exchange platform, including Binance, to invest in coins is risky.
The FCA has previously warned Brits that they should be prepared to “lose all of their money” if they choose to put money into cryptocurrencies.
It revealed that 2.3million people in the UK now have crypto assets, but only roughly a third (38%) consider it a gamble to invest, despite experts warning about the dangers of doing so.
AJ Bell financial analyst Laith Khalaf said Brits should think carefully before putting any savings into coins.
“Cryptocurrencies are incredibly volatile and may not last the distance, so buying them is a risky endeavour.
“What’s more this is a really new market, and so the companies and exchanges operating in this area don’t have the same levels of oversight and governance as the London Stock Exchange, for instance, which has been operating for over 300 years.”
The Sun approached Binance for comment.
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