Binance's Struggle to Secure New Partners for UK Market Re-entry Amid Regulatory Constraints
Summary:
Binance is reportedly struggling to find new partners for its return to the UK market, due to potential collaborators being deterred by local regulations. The Financial Conduct Authority (FCA)-sanctioned firms have rejected the global crypto exchange's advances, leading to difficulties in authorizing financial promotions. Binance denies these challenges and maintains that they are actively engaged in conversations with potential approvers and expect a positive resolution. This setback follows Binance's legal complications in the US, which led to the resignation of its former CEO, Changpeng Zhao.
Binance, a worldwide cryptocurrency exchange, is reportedly struggling to secure new collaborators that would enable its re-entry into the UK market, as disclosed in a Bloomberg report. The findings are based on sources who wished to remain anonymous. For Binance to regain access to the UK, a regulatory licensee, sanctioned by the Financial Conduct Authority (FCA), must vouch for its return. This facilitator's prominent role includes approving finance offers and confirming their conformity to FCA regulations prior to their public release.
In the past few months, the crypto platform has had its offers rejected by no less than three firms having the necessary regulatory approval, revealed Bloomberg's inside sources. Its former UK associate, Rebuildingsociety.com (REBS), cut ties in October after FCA restrictions were applied on the company, resulting in the loss of its approval of Binance's financial products. Owing to this, Binance was forced to suspend new user registrations and look for a fresh sponsor. The FCA's warnings to potential partners have further driven them away from negotiating deals with Binance.
Binance has disputed these claims, denying any struggle in finding a successor. The crypto exchange informed Bloomberg that there was no truth to them being turned down by regulatory licensed businesses in the UK, further adding they are in constructive talks with possible sponsors and are optimistic of a favorable announcement shortly.
In May 2023, Binance officially withdrew its registration from the FCA through its subsidiary, Binance Markets Limited (BML). This followed the cancellation of regulatory licenses for services that were never offered in the UK, as a result of which no Binance division is accredited by the FCA to provide any services in the country.
The complications in the UK likely stem from the exchange's legal issues abroad. In June 2023, Binance and its ex-CEO, Changpeng Zhao, faced a lawsuit filed by the United States Securities and Exchange Commission. The filed case accused the firm of offering unregistered securities within the US, along with charges of wash trading and others. As a part of a $4.3 billion agreement with the US Department of Justice (DOJ), Zhao admitted to breaching US Anti-Money Laundering laws and consented to resign as the exchange's CEO in November. His sentencing is set for late February.
Published At
2/1/2024 9:52:25 PM
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