The Financial Conduct Authority (FCA) has banned cryptocurrency exchange Binance from operating in the UK.

The financial services watchdog did not outline the reasons for its actions.

Binance was the largest cryptocurrency exchange in the world in terms of trading volume as of April 2021.

The company was founded in China in 2017 by Changpeng Zhao, and it now competes with Coinbase, Kraken, and Bitstamp.

The Cayman Island-domiciled company has until Wednesday to prove it has complied with the regulators demands and to remove its UK advertising.

The move comes a day after Japan’s financial regulator warned that Binance is operating in Japan without permission.

The FCA said in March that a significant number of firms are withdrawing their applications, as result of not being able to meet its anti-money laundering (AML) standards.

Cryptocurrency investment is becoming increasingly mainstream in the UK; 2.3 million UK adults now hold cryptoassets according to the FSI, up from 1.9 million in 2019 in the last 12 months.

Public trust in cryptocurrency is also on the rise; a third - 38 per cent - of crypto users regard them as a gamble, down from 47 per cent last year.

"Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA,” said an FCA spokesperson. "No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK."

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