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UK regulators have blocked Binance’s attempts to market itself to British consumers under the latest clampdown on the crypto industry.
The world’s biggest cryptocurrency exchange, which has frequently clashed with the Financial Conduct Authority, had tried to navigate new industry standards which came into force on Sunday by teaming up with a locally regulated firm.
However, on Tuesday the FCA said Rebuildingsociety.com, Binance’s Leeds-based partner, had been added to its list of regulated companies forbidden from promoting crypto services in the UK.
The move is a fresh setback to Binance’s ambitions to expand in the UK market. The exchange, which says it has no headquarters and has fallen foul of regulators around the world, was in 2021 ordered by the FCA to halt all regulated activity in the UK after failing to respond to basic queries.
The agency has only recently been given powers to oversee some aspects of the sprawling crypto industry, including compliance with anti-money laundering rules and advertising standards.
Under the new rules, promoting crypto assets to UK customers without approval can result in an unlimited fine, and potentially up to two years imprisonment. They apply to all companies, whether based in the UK or abroad.
In the three days since they came into effect, the FCA has issued more than 150 warnings to companies that are not registered with or authorised by the regulator, including exchanges such as Huobi and KuCoin. Another cryptocurrency exchange, Bybit, last month announced plans to wind down in the UK because it could not comply with the incoming rules.
“The FCA has set down a firm marker for crypto firms about preventing crystallising risks and intervening early enough to prevent harm,” said Lisa Lee Lewis, a lawyer specialising in digital assets at Addleshaw Goddard.
Binance said last week its partnership with Rebuildingsociety.com meant it would comply with the FCA rules, allowing it to offer UK users services such as crypto trading, credit cards, non-fungible tokens and loans.
The FCA said in an update on its website on Tuesday that Rebuildingsociety.com had until the end of Wednesday to withdraw all of its crypto promotions. It is “disappointing we have had a restriction imposed on us, and we are working to remove it,” Rebuildingsociety.com said, adding that it intended to appeal against the decision.
Binance said it had “invested an enormous amount of time and resources” to ensure it in compliance with the new FCA requirements, but declined to confirm whether it would seek a new partnership or cease promotions in the UK.
