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Binance, the world’s largest cryptocurrency exchange, has stopped accepting new customers in the UK after regulators cracked down on digital assets companies advertising to British consumers.
The company announced the policy less than an hour before it came into effect late on Monday, after the Financial Conduct Authority last week blocked Binance’s plan to try and navigate the new industry standards.
The move is a blow to Binance’s ambitions of expanding in the UK market after the rules came into force earlier this month. The standards are among the toughest in the world as the regulator tries to beef up protection for consumers following the collapse in digital asset prices last year and the implosion of companies such as FTX.
Only authorised companies can promote crypto adverts in the UK. Failure to comply can result in an unlimited fine and potentially two years in prison. The rules apply to all companies, whether based in the UK or abroad. The FCA has issued more than 150 alerts on unauthorised crypto groups’ promotions in the first week of the new regime.
Binance, which says it has no headquarters, fell foul of the FCA in 2021 and was ordered to halt all regulated activity in the UK after failing to respond to basic queries.
The exchange had partnered with Rebuildingsociety.com but last week the FCA ruled that the Leeds-based company was forbidden from promoting crypto services in the UK, blocking Binance’s ability to lawfully market itself in Britain.
“We have disclosed to the FCA that we are in active discussions with another suitable FCA authorised firm to approve our financial promotions as soon as possible,” Binance said.
Existing Binance customers will still be able to use services as usual but no new products and services will be made available in the interim, the company added.
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The development is the latest in a series of setbacks for Binance this year. It has received lawsuits from the two main US markets regulators, the Securities and Exchange Commission and the Commodity Futures Trading Commission, and has lost its dominant grip on the crypto market.
According to numbers provided by CCData, Binance’s share of the crypto market fell to 34 per cent in September, marking the seventh consecutive month of declines since the exchange controlled almost 57 per cent of the market in February.
Despite the exchange’s tumultuous history with UK regulators, it promised earlier this year to make a fresh bid to be regulated in the jurisdiction.
At the Financial Times’ crypto and digital assets summit this summer Patrick Hillman, then the company’s chief strategy officer, said Binance would do “everything [it] possibly can” to be regulated in the UK.
The company has since declined to confirm whether it has reapplied to the FCA’s regime for crypto businesses.
