Binance has suspended access to its crypto exchange for new users based in the UK, after a partnership with a third party to approve communications on its platform under new local rules was terminated by the country’s watchdog.
(Bloomberg) — Binance has suspended access to its crypto exchange for new users based in the UK, after a partnership with a third party to approve communications on its platform under new local rules was terminated by the country’s watchdog.
Any customers based in the UK not already signed up to Binance’s platform were no longer able to join the exchange from 5 p.m. in London on Monday, according to a blog post published by Binance. The move puts the world’s largest crypto exchange out of reach for new users in the UK, setting the scene for a battle by Binance to return to one of the sector’s biggest markets outside of the US.
The UK’s financial promotions regime was widened starting on Oct. 8 to include cryptoasset service providers, regardless of their location. All crypto platforms are now required by the regulator to display clear risk warnings to UK-based consumers and meet higher technical standards, with all communications needing to be approved by an FCA-authorized firm. Penalties for not doing so include being added to the FCA’s public warning list, as well as unlimited fines and prison time.
Binance had hired peer-to-peer lending platform Rebuildingsociety.com to approve its communications made to UK-based customers, which includes all text on its website and app. The UK’s Financial Conduct Authority restricted Rebuildingsociety.com’s ability to approve communications for crypto companies on Tuesday, ordering it to retract all existing approvals by 5 p.m. in London on Oct. 11.
Read: UK Plans Swift Action if Crypto Firms Break New Promotion Rules
A Binance spokesperson said it had told the FCA that it is “in active discussions with another suitable FCA-authorized firm to approve our financial promotions as soon as possible.” The FCA didn’t immediately respond to requests for comment.
Binance and its chief executive Changpeng Zhao are under intense regulatory scrutiny globally. The company is currently facing a number of lawsuits in the US and Canada, as well as a years-long investigation by the US Department of Justice. The Financial Conduct Authority previously warned consumers against using Binance’s services in 2021, adding that the company was “not capable” of being effectively regulated due to its murky global structure.
Other crypto firms have already fallen foul of the FCA’s new rules. Exchanges Huobi and KuCoin were among more than a hundred companies added to the watchdog’s warning list in the first 24 hours of it going live earlier this month, with consumers seeing the generic warning: “This firm may be promoting financial services or products without our permission. You should avoid dealing with this firm.”
(Updates to include Binance comment and context in the fifth and seventh paragraphs.)
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