Binance has suspended access to its cryptocurrency 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 5pm 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 the US.
The UK’s financial promotions regime was widened starting on October 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-authorised firm. Penalties for not doing so include being added to the FCA’s public warning list, as well as unlimited fines and prison time.
Fake Binance messages to Hongkongers help crooks steal HK$3.5 million in assets
Fake Binance messages to Hongkongers help crooks steal HK$3.5 million in assets
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 5pm in London on October 11.
A Binance spokesperson said it had told the FCA that it is “in active discussions with another suitable FCA-authorised firm to approve our financial promotions as soon as possible.” The FCA did not 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 100 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.”
