Binance has temporarily suspended new user registrations from the UK starting today, according to an update today. The announcement comes in response to new rules laid down by the Financial Conduct Authority (FCA). These regulations, in effect since October 8, require non-registered crypto platforms to collaborate with an FCA-authorized firm for marketing. Originally, Binance had agreed to work with Rebuildingsociety.com Ltd (REBS) to fulfill these conditions. However, REBS recently lost its ability to approve financial promotions, triggering Binance’s decision to halt new sign-ups.
For existing UK users, access to their accounts remains uninterrupted. Nevertheless, these users will be unable to avail themselves of new products or services until the situation is rectified. Additionally, the latest FCA actions have broader ramifications. Other crypto exchanges, including Kucoin and HTX, are also under the FCA’s scanner. They were added to the regulatory body’s warning list, implying that their customers are not eligible for financial loss schemes if these platforms fail.
Moreover, Binance isn’t a novice when it comes to regulatory tangles. The company has also experienced clashes with the United States Securities and Exchanges Commission (SEC). Both Binance and its CEO, Changpeng Zhao, along with its American branch, Binance.US, were sued for listing unregistered securities and offering services to U.S. customers. Consequently, legal proceedings are underway to have the case dismissed.
Amid these challenges, Binance is seeking another FCA-authorized partner to help them meet UK marketing requirements. The company announced that some temporary restrictions would take effect on their platform, which includes both their website and mobile app. The restrictions will remain in place until Binance finds a new FCA-authorized approver and receives reapproval for its financial promotions.
Hence, the crypto giant finds itself entangled in a web of regulatory complexities. The FCA’s new guidelines aim to tighten the screws on crypto exchanges operating without permission. Meanwhile, Binance’s woes don’t end in the UK or the U.S.; similar challenges are mounting in other jurisdictions. These hurdles underline the fact that the road ahead for Binance, and indeed for many other crypto exchanges, is fraught with regulatory obstacles.
