By
Chimamanda U. Martha
April 19th, 2024
The alleged lack of transparency from Binance in the investigation is poised to influence upcoming UK crypto regulations.
United Kingdom (UK) lawmakers are looking to find out the role of top cryptocurrency exchange Binance in the recent crash of FTX. Although the exchange has sent answers to some of the questions asked of it, it appears the lawmakers are still not satisfied.
Crypto Regulations in the UK May Take New Shape
A recent report by Bloomberg suggests that the answers sent in by Binance did not do justice to the questions asked by the parliamentary committee. According to Alison Thewliss, a member of the Treasury Committee, “it doesn’t really give us the real background detail.”
Thewliss also says that more questions will still be asked of Binance to get the full idea of what went down with FTX. Her reason is that the fate of the crypto industry might be dependent on the thoroughness of the ongoing investigation. It is also important to note that FTX was a major competitor to Binance before it went bankrupt. Therefore, the committee will be dedicated to reviewing Binance’s internal records. They will also determine what caused the exchange to dispose of its FTT (FTX’s native token) holdings.
But for what it’s worth, the outcome of the investigation is expected to impact the kind of crypto regulations that the committee will eventually recommend for the U.K. This means that the national regulator, the Financial Conduct Authority (FCA) may now exercise a broader control over crypto assets.
Recall that currently, the FCA only issues regulatory approval to crypto firms that have duly complied with its anti-money laundering laws.
Binance Faces Scrutiny in UK and US
Meanwhile, Binance is not exactly new to being scrutinized by authorities. The giant exchange has had several run-ins with global regulators in the past, including with UK’s FCA.
This time, however, the UK is not the only nation investigating Binance, particularly with regard to FTX’s downfall. The US is also investigating the exchange as a December hearing has been set to be held at the House Financial Services Committee.