Binance adjusts to UK regulatory shifts post FCA’s canceled permissions

TLDR

  • Binance has launched a dedicated domain for UK users, aligning with the Financial Promotions Regime updates.
  • The exchange has also partnered with Rebuildingsociety.com Limited to validate crypto-related marketing materials.
  • Binance had previously faced challenges with the FCA, resulting in the cancellation of several permissions given to Binance’s UK unit in June.

Binance, a prominent cryptocurrency exchange, has introduced a specialized domain catering to its users in the United Kingdom (UK). This strategic initiative represents a substantial effort towards aligning with the UK’s recently updated Financial Promotions Regime. Additionally, the exchange has joined forces with Rebuildingsociety.com Limited, a firm regulated by the Financial Conduct Authority (FCA). This partnership is geared towards validating crypto-related marketing and communication materials, further solidifying the exchange’s commitment to complying with the new regulatory framework in the UK.

Binance launches dedicated UK platform

Binance‘s dedicated UK domain will provide various services, encompassing fiat and crypto transactions, spot and margin trading, and access to the NFT marketplace. Users can also access features like Binance Pay, crypto loans, and the launchpad. However, starting October 8, 2023, certain services will be restricted for UK retail users. These services encompass gift cards, Binance Academy, research materials, feed functionalities, and referral incentives.

It’s worth highlighting that the new Financial Promotions Regime does offer exemptions, primarily benefiting institutional and professional investors. While retail users will experience these adjustments, specific investor categories will still have access to a wider range of services.

Binance’s renewed emphasis on the UK market is significant, especially considering its prior challenges with the FCA. Following the FCA’s characterization of Binance’s local entity as unregulated in mid-2021, the exchange received regulatory warnings globally. As a result, in June, the exchange opted to retract its application for compulsory FCA registration. However, the exchange has shifted its focus, prioritizing compliance with the UK’s revised Financial Promotions Regime.

Lucy Castledine, Director of Consumer Investments at the FCA, has been unequivocal about the regulatory expectations. She stated that come October 8, they will be taking action against firms illegally marketing to UK consumers. The FCA’s advertising rules for the cryptocurrency industry are stringent. Crypto firms are required to register and have their ads approved. Additionally, they must adjust their systems to ensure potential investors have a 24-hour window to reconsider their investment decisions.

Binance’s regulatory challenges

On June 19, the FCA canceled several permissions previously given to the exchange’s UK unit. Binance Markets Limited had received various permissions from the Financial Conduct Authority (FCA) for activities that were never actually conducted or offered in the UK. 

The spokesperson affirmed that the company had requested the withdrawal of these permissions, explaining that since they were unlikely needed, Binance Markets Limited decided it was prudent to cancel them per the FCA’s recommendations. The spokesperson clarified that this decision does not affect Binance.com, which does not own or operate any crypto services in the UK and is only accessible to UK consumers on a reverse solicitation basis.

In addition to these developments, the exchange is encountering regulatory challenges in other jurisdictions. Its US unit and founder, Changpeng “CZ” Zhao, is facing a lawsuit from the Securities and Exchange Commission (SEC) for allegedly selling securities and operating an unregistered trading platform. Additionally, French authorities have affirmed an ongoing investigation into the platform for suspected “aggravated money laundering” dating back to at least 2022.

In 2021, the FCA notably stated that the exchange could not be effectively supervised and informed its UK arm that it was prohibited from conducting regulated activities in the country. The regulator also noted that the Binance Group appeared to offer a range of products and services to UK customers via the website Binance.com.

In response to regulatory challenges in the U.S., the exchange is also scaling back its European presence. That includes deregistering its regulated subsidiary in Cyprus and leaving the Netherlands due to its failure to obtain Dutch regulators’ virtual asset service provider (VASP) license.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

 

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