Cryptocurrency update: Binance bounced out of the UK

The world’s largest cryptocurrency exchange, Binance, gets its UK marching orders as the FCA clamps down on unregulated activity.

Cryptocurrency update

UK FCA bans Binance

The UK’s Financial Conduct Authority has ordered Binance to halt all regulated activity in the United Kingdom.

This is the latest in a fresh spate of regulations affecting digital token exchanges globally. Citing issues like crypto’s role in money laundering and fraud, as well as weak customer protections, and even environmental concerns, many financial authorities are tightening cryptocurrency regulations worldwide.

Binance Markets Limited, a London-based affiliate of the main Binance business, has been ordered to cease its UK activities. The FCA has also noted that no other entity under the Binance umbrella has any form of authorisation allowing it to offer crypto exchange and trading services to British clients.

A defiant Binance has said the FCA’s decision “has no direct impact on the services provided by Binance.com”, as Binance Markets Limited is a separate entity.

As it stands, however, Binance will have to cease offering services to UK clients. It will also have to stop any marketing and advertising campaigns.

Binance Markets Limited had applied to become a registered cryptocurrency company with the FCA but pulled its application in May following intense scrutiny by the Financial Conduct Authority. For context, controls and tools for tackling fraud and illicit activities are analysed as part of the FCA review process.

Japan’s Financial Services Agency reported last week that it had warned Binance that it was conducting cryptocurrency trading without the proper authorisation. Binance was also warned by German financial authorities in April that the exchange had probably violated securities rules over the launch of stock token trading.

Despite intensification of regulatory scrutiny, Binance continues to be one of the world’s most foremost cryptocurrency exchanges. Peak trading volumes recently hit over $1.5tn. It will be interesting to see where Binance’s journey takes it next. The Chinese firm is probably already feeling shaky given the increasingly hard line stance pursued by China’s government, but its trading numbers suggest retail interest in digital token trading is still as high as ever.

Guggenheim predicts $10,000 Bitcoin bottoming

Bitcoin could drop as low as $10,000 during its current fluctuations, according to Guggenheim Partners’ Chief Investment Officer Scott Minerd.

Speaking to CNBC last week, Minerd made his bearish prediction. However, Minerd was also quick to say investors and traders should not be put off by putting money into Bitcoin right now. He also said Bitcoin could be trading sideways for the next few years before it turns bullish again.

Despite dropping massively from the recent $65,000 all-time high, Bitcoin is still up around 30% year-on-year. As of Monday 28^th June, the crypto market was steering a bullish course, with BTC breaking above $35,000.

Showing the rollercoaster valuations that BTC is subject too, Minerd and Guggenheim’s Bitcoin price predictions are a window into how price actions are difficult to predict. In December, Minerd was touting a $400,000 BTC price. By January, he was saying there wasn’t enough institutional interest to support the token’s then $41,000 all-time high.

In early February, Minerd had predicted the highest BTC price prediction to date: $600,000.

Does this mean Minerd and Guggenheim are untrustworthy? Probably not, but what this does suggest is predicting what happens in Bitcoin markets is far from an exact science.

On the other hand, Vinny Lingham, CEO of Gyft, has said BTC can still hit $100,000 this year if it holds above $30,000 consistently. Lingham has been given successful BTC price forecasts in the past and is considered something of an oracle.

Which prediction will prove accurate? Time will tell. Bitcoin has had a bumpy couple of weeks but appears to be making gains once more.

Andreessen Horowitz raises $2.2bn to double down on crypto

Venture Capitalists Andreessen Horowitz has raised $2.2bn in financing for a third fund devoted entirely to cryptocurrencies.

This is double more what the firm hoped to raise in what has been deemed a sign of strong institutional demand for cryptocurrency.

The volume of the investment, Andreessen had previously hoped to raise $1bn for its new fund, shows how, despite the recent market setbacks, there is still massive interest in digital finance and tokens.

Andreessen Horowitz has a long history of investment into digital technologies and platforms. It backed Facebook, for example, and has already invested in the Coinbase crypto exchange.

In this newest fund, the Silicon Valley-based firm says it is focused on the next generation of visionary crypto founders.

“We believe that the next wave of computing innovation will be driven by crypto,” the company said in a blog post. “The size of this fund speaks to the size of the opportunity before us: crypto is not only the future of finance but is poised to transform all aspects of our lives.”

Andreessen’s fundraising efforts show the conflict currently sitting at the heart of the crypto market. On the one hand investors, from retail to institutional, want to invest their capital in digital coins. Regulators want to clamp down on crypto activity from a safety and money laundering perspective.

Both fine, but one appears to heavily impact the other. What’s clear is the regulatory and investment worlds must align for the market to really progress.