In a significant development, Binance, the world’s largest cryptocurrency exchange, announced the suspension of access to its platform for new users in the United Kingdom.
According to a Bloomberg report, the move comes after the termination of a partnership with a third-party firm responsible for approving communications on the exchange, as mandated by the UK’s financial watchdog.
UK Users Blocked
Effective from 5 p.m. London time on Monday, October 16, individuals in the UK who have not yet registered with Binance will no longer be able to create new accounts, according to an official blog post by the exchange.
This decision makes the exchange challenging as it seeks to regain access to one of the most significant cryptocurrency markets outside of the United States.
The regulatory changes that prompted this move stem from expanding the UK’s financial promotions regime, which now covers crypto asset service providers regardless of their jurisdiction.
Under the new rules, all crypto platforms must display clear risk warnings to UK-based consumers and meet stringent technical standards. Additionally, all communications must receive approval from an FCA-authorized firm.
Non-compliance carries severe penalties, including being listed on the FCA’s public warning register, unlimited fines, and potential criminal charges.
Binance Seeks New Communications Approver
To comply with these requirements, Binance had enlisted the services of peer-to-peer lending platform Rebuildingsociety.com to approve its communications with UK customers, including website content and app text, according to Bloomberg.
However, the FCA recently restricted Rebuildingsociety.com’s authorization to approve communications for crypto companies, ordering the withdrawal of all prior approvals by October 11 at 5 p.m. London time.
Binance disclosed its intention to engage a new approver for its communications shortly. On this matter, the exchange stated:
We are working closely with the FCA to ensure that our users are not harmed by these developments and are looking to find another suitable FCA authorised firm to approve our financial promotions as soon as possible.
This latest setback adds to the growing regulatory scrutiny faced by Binance and its CEO, Changpeng Zhao, on a global scale. The company is currently entangled in several legal disputes in the United States and Canada, alongside an ongoing investigation by the US Department of Justice.
The Financial Conduct Authority previously cautioned consumers against using Binance’s services, expressing concerns over the exchange’s ability to be effectively regulated due to its complex organizational structure.
As Binance navigates these regulatory challenges, its exclusion of new UK users reflects the increasing pressure on cryptocurrency exchanges to adhere to stricter compliance standards. It underscores the evolving landscape of the crypto industry.
As of the time of writing, the price of Binance Coin (BNB) stands at $219, reflecting a 1.3% increase over the past 24 hours and a 4.2% gain over the seven days.
Featured image from Shutterstock, chart from TradingView.com