The world's biggest crypto exchange Binance is not capable of being supervised properly and poses a significant risk to consumers, Britain's Financial Conduct Authority (FCA) said in a document published on Wednesday.
The exchange has come under pressure from regulators across the world in past weeks due to concerns over the use of crypto in money laundering and risks to consumers.
The FCA banned Binance in June from conducting any regulated activity and imposed several requirements on the platform.
Its document published on Wednesday expands on its reasons for placing the requirements on Binance's UK-based Binance Markets Limited arm.
"Based upon the firm's engagement to date, the FCA considers that the firm is not capable of being effectively supervised," the watchdog said in the document dated June 25.
"This is of particular concern in the context of the firm's membership of a global group which offers complex and high-risk financial products, which pose a significant risk to consumers."
A Binance spokesperson said that as noted by the FCA, Binance Markets Limited has fully complied with all the watchdog's requirements and it continues to engage with the FCA to resolve any outstanding issues that may exist.
"As the cryptocurrency ecosystem industry continues to grow and evolve we are committed to working with regulators and policymakers to develop policies that protect consumers, encourage innovation, and move our industry forward," the spokesperson said.
The FCA said it sent two requests for information about Binance's wider global business model and its stock tokens.
"The FCA considers that the firm's responses to some questions amounted to a refusal to supply information," the watchdog said in the document.
The exchange, whose holding company is registered in the Cayman Islands, has scaled back its product offerings and said it wants to improve relations with regulators.
The FCA said volumes at Binance in June were estimated to be between $11 billion and $38 billion.
Binance's UK arm was not currently carrying out regulated activities and that it had not done so for more than 12 months, the FCA said in its document.