In a quest to re-enter the UK market, Binance, the global cryptocurrency exchange platform, is experiencing notable difficulties finding new partners in the UK. A recent Bloomberg investigation, drawing on unnamed sources close to the matter, reveals that the platform has been rejected by at least three partners authorised by the Financial Conduct Authority (FCA) since last October.
Finding an authorised approver
Under UK regulations, in order to re-enter the UK market, Binance must obtain the approval of an ‘authorised approver‘ from the FCA. The role of this approver is to validate the platform’s financial promotions, ensuring that they comply with FCA rules before they are published. This requirement has become a major obstacle for Binance, especially as its UK partner, Rebuildingsociety.com (REBS), was restricted by the FCA in October, preventing it from promoting Binance’s products and services.
Regulatory challenges and Binance’s response
The FCA’s ban on REBS has forced Binance to suspend the onboarding of new UK users and to look for a new approver. The FCA has also expressed concerns about new collaborations with Binance, potentially deterring other firms from partnering with the exchange platform.
In response to these reports, Binance has denied that it is experiencing difficulties in finding a new partner in the UK. In a statement to Bloomberg, the platform said: « It is not accurate to say that we have been rebuffed by Section 21 approvers in the UK. We continue to have productive conversations with potential approvers and are confident that we will be able to provide a positive update soon. »
Binance’s withdrawal from the UK market and legal implications
In May 2023, Binance formally cancelled its registration with the FCA via its subsidiary Binance Markets Limited, following the firm’s decision to cancel regulatory permissions for activities it never offered in the UK. Currently, no Binance entity is authorised by the FCA to provide services in the country.
The challenges Binance faces in the UK could also be linked to its legal problems overseas. In June 2023, the US Securities and Exchange Commission filed a lawsuit against Binance and its former CEO, Changpeng Zhao, for offering unregistered shares in the country and engaging in wash trading practices, among several other allegations. Zhao pleaded guilty to violating US anti-money laundering requirements and agreed to resign as CEO of the platform in November as part of a $4.3 billion settlement with the US Department of Justice. His sentencing is scheduled for the end of February.
This set of circumstances highlights the growing regulatory and legal challenges facing cryptocurrency giants like Binance as they strive to operate in global markets. As Binance struggles to re-establish its presence in the UK, the outcome of these efforts remain uncertain, highlighting the importance of regulatory compliance in the cryptocurrency industry.
