20th June 2023 > > Binance and the UK.

tl;dr

Binance and UK regulation.

Market Snap

Market Wrap

The Grayscale BTC Trust discount has narrowed following the news that Blackrock has applied for a spot BTC ETF. At nearly 50% earlier this year (https://ycharts.com/companies/GBTC/discount_or_premium_to_nav) it still sits at a whopping 37%. Grayscale has also put in their own ETF application several times only to be rebuffed by the SEC. If a future application for ETF status was granted that discount would disappear overnight, as ETFs are subject to the forces of arbitrage unlike trusts.

Long-term holders of BTC might think about putting some of that investment into the Grayscale BTC Trust. For those of us in the UK, the UK regulator in its wisdom has determined we are not allowed to take advantage of this clear opportunity.

Thanks, for that.

Curious Cryptos’ Commentary – Binance UK

The ill-informed press – or the press that is biased against cryptos, and we all know who they are – are reporting that Binance has agreed with the FCA to “de-register” from the UK. It has also been reported that UK users are having trouble accessing their accounts.

Total and utter hogwash.

Binance Markets Ltd. (a subsidiary set up to trade regulated activities i.e. futures and options) never achieved regulated status and never conducted business in the UK. Binance has agreed to withdraw this application to the FCA for regulated status.

Meanwhile, UK users who have accounts at Binance.com have full and unfettered access as before.

Curious Cryptos’ Commentary – UK regulation

Spot market providers like Binance may soon have to go through a process of regulatory approval.

The Lords have approved the Financial Services and Markets Bill (https://bills.parliament.uk/bills/3326). That isn’t the end of the legislative process of course, but it signals the beginning of the end.

Originally the scope was just stablecoins, reflecting UK parliamentarians’ obsession with CBDCs, but in response to the EU’s delightful piece of crypto regulation MiCA, it has been extended to cover all cryptocurrencies as a regulated activity.

In principle, this is a very positive move. Targeted and appropriate regulation will drive crypto adoption. It’s getting the “targeted” and “appropriate” bit right that is a little tricky.

This bill is not just focused on cryptos, it aims to reset the entire future regulatory framework around financial services, which suggests to me that nothing will happen for the foreseeable future.

As an aside, I was reading a story that in tandem with this bill, the UK regulator had publicly stated that some reforms mooted by the Treasury would be wrong and would not be implemented. Not wishing to get into the details of the mooted reforms, since when did we allow the power to make political decisions to reside in the regulators? Or am I being naïve, and we really have now entered a technocratic dystopian world where those who make the real decisions are appointed and not voted into their jobs?

…

Andrew Griffith, economic secretary to the UK Treasury, is a bit more upbeat than I.

He has claimed that the UK will have specific crypto regulation within 12 months. I do hope so, as crypto businesses need clarity. I suspect that the instinct of our lawmakers will be to be as tough as possible, which will simply drive crypto tax dollars into the arms of the EU.