In a quest to re-enter the UK market, Binance, the global cryptocurrency exchange platform, is encountering notable difficulties in finding new partners in the UK. A recent Bloomberg investigation, drawing on anonymous sources close to the matter, reveals that the platform has been rejected by at least three partners authorized by the Financial Conduct Authority (FCA) since last October.
Finding an authorized approver
Under UK regulations, to re-enter the UK market, Binance must obtain the approval of an “authorized approver” from the FCA. The role of this approver is to validate the platform’s financial promotions, ensuring their compliance with FCA rules prior to publication. 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 ban imposed on REBS by the FCA 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 companies 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 officially cancelled its registration with the FCA via its subsidiary Binance Markets Limited, following the company’s decision to cancel regulatory permissions for activities it never offered in the UK. Currently, no Binance entity is authorized by the FCA to provide services in the country.
The challenges Binance faces in the UK could also be linked to its legal problems abroad. In June 2023, the U.S. Securities and Exchange Commission filed suit against Binance and its former CEO, Changpeng Zhao, for offering unregistered securities 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 remains uncertain, underscoring the importance of regulatory compliance in the cryptocurrency industry.
