The UK's Financial Conduct Authority has said that the Binance Group, which operates the world's biggest cryptocurrency exchange, is prohibited from carrying out any activity in the country without its approval.
The regulator said the company"appears to be offering UK customers a range of products and services via a website, Binance.com".
However, Binance Markets Limited, the company's UK arm, "is not permitted to undertake any regulated activity", it said.
No other part of the US-based group is authorised or licensed to carry out activity in the UK either, it said.
"While we don't regulate crypto assets like Bitcoin or Ether, we do regulate certain crypto asset derivatives [such as futures contracts, contracts for difference and options], as well as those crypto assets we would consider 'securities'," the FCA said.
"A firm must be authorised by us to advertise or sell these products in the UK."
Binance is currently the world's biggest exchange for both spot and futures cryptocurrency trading, with 372 coins listed on its exchange, according to Coinmarketcap.
By 7.00pm on Sunday, traded volume on the exchange stood at more than $13.8 billion during the previous 24 hours, compared with $3.6bn on China-based Huobi Global, the second-biggest exchange.
Binance Markets "is a separate legal entity and does not offer any products or services via the Binance.com website", a company spokeswoman told The National.
The entity was acquired in May last year but has yet to launch its UK business or use any of its FCA regulatory permissions, she said.
"We take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules and laws in this new space," the spokeswoman said.
Regulators are casting a keener eye over cryptocurrencies as investors pile into digital assets after a trebling of the price of Bitcoin over the past 12 months, leading to an increase in criminal activity through fraud and outright theft.
The Financial Sector Conduct Authority of South Africa said last Thursday that although it does not currently regulate the sector, it "is in the process of considering declaring crypto assets as a financial product" to protect the public from fraud.
This followed accusations that the co-founders of Africrypt, Ameer and Raees Cajee, had absconded with 69,000 Bitcoin worth about $3.6bn.
The pair denied this, telling the BBC through a lawyer that the company, which has ceased trading, had been the victim of a hack and that customers' coin wallets had been compromised.
The price of the biggest cryptocurrency assets recovered on Sunday after a slump earlier at the weekend.
Bitcoin, the world's biggest cryptocurrency, was up 5.9 per cent at $32,980.90 on the Luxembourg-based Bitstamp exchange.
Ether, the second-biggest, traded 3.5 per cent higher at $1,830.27 at 7.19pm UAE time.