British investors report £36m of Binance crypto frauds

Binance is the world’s largest crypto exchange, and is used by an estimated 28 million users worldwide. In 2017, it began issuing its own currency, BNB, which can be traded both on the Binance exchange as well as other online platforms like FTX. The £36m relates to all wallet and coin frauds.

Binance, along with its peers, is facing a hardening stance from regulators across the globe as concerns grow around protections for retail investors.

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It was banned from carrying out regulated activities in the UK last year following a public warning from the Financial Conduct Authority. The FCA said Binance was “not capable” of supervision by regulators and posed a “significant risk to consumers”.

The exchange has also drawn controversy, as it faces one of Britain’s biggest ever competition claims, after the former chair of the competition watchdog, Lord David Currie, kicked off a nearly £10bn case against Binance and three other crypto firms in August.

Despite this, Binance won the backing of football star Cristiano Ronaldo earlier this year, in one of the highest profile sponsorship tie-ups between a crypto company and a sports player in history.

Ronaldo has 459 million followers on Instagram, giving him one of the largest global reaches of any sports player. The FCA does not have the power to stop British investors using Binance’s exchange or trading its cryptocurrency, despite the blacklisting from any regulated activity in the UK.

READThe Fintech Files: UK crypto cops grow some teeth

In total, the City of London Police said there were 9,288 complaints of cryptocurrency crime across all platforms and coins with the average victim losing £21,620.

Simon Jones, CEO at InvestingReviews.co.uk, which obtained the figures via a request under the Freedom of Information Act, said: “These police figures will do little to change the minds of those who believe that cryptocurrencies are the Wild West of personal finance investing.”

Binance’s anti-crime unit is led by a former special agent at the Internal Revenue Service in the US, Tigran Gambaryan. He said that while Binance supported the Binance coin, it “didn’t control it”.

Separately, Binance and other crypto exchanges will soon be made responsible for stopping criminals from moving assets off their platforms to avoid scrutiny, after a UK High Court judge ruled that exchanges should be recognised as trustees of stolen cryptocurrencies.

A 24 June ruling made public on 12 July also means that where British citizens are affected by scams, exchanges will be subject to UK laws, even if they and the stolen assets are based abroad.

To contact the author of this story with feedback or news, email Alex Daniel