FCA Clamps Down on Binance's UK Partner, Rebuildingsociety, for Marketing Rule Violations
Summary:
The United Kingdom's Financial Conduct Authority (FCA) imposed restrictions on peer-to-peer lending platform, Rebuildingsociety, a partner of the crypto exchange Binance, over violations of marketing regulations. The FCA's marketing rules, which mandate clear, fair and non-deceptive advertising, became effective from Oct 8. Binance, unregistered with the FCA, intended to use Rebuildingsociety to provide localized access to its services for U.K. users. This follows the recent announcement of their collaboration to offer services like spot-trading and non-fungible tokens to U.K. users. FCA's enforcement may impact Binance's operations in the U.K. market.
The United Kingdom's Financial Conduct Authority (FCA) has imposed restrictions on Rebuildingsociety, a peer-to-peer lending platform and a partner of the crypto exchange Binance, to comply with the regulator's marketing rules. The FCA stated in an Oct.10 directive that Rebuildingsociety could not authorise any financial promotions content related to qualifying crypto assets by unauthorised persons, and had to revoke any existing approvals. This hints at a possible cessation of Binance's U.K. partnership with Rebuildingsociety for FCA's marketing standards compliance, which took effect from Oct. 8. The FCA issued a warning to Rebuildingsociety to inform all its customers, likely including Binance, that it was not allowed to authorise specific financial promotions content, and must remove any advertisements offering to approve such promotions. They also had to acknowledge their compliance with the FCA in writing. Binance planned to utilise Rebuildingsociety to enable its U.K. customers to access its product and service offerings via a local domain, since the exchange is not registered with the FCA.
The said restrictions were put forth less than a week after Binance—an unregistered entity with the FCA—had announced its collaboration with Rebuildingsociety. The alliance would have permitted Binance to promote spot trading, non-fungible tokens, and other services to users in the U.K. In line with the marketing rules set up by the FCA, Binance had stated it would not be providing gift cards or referral bonuses anymore. The marketing rules, effective from Oct. 8, mandate firms, including crypto firms, to present transparent, fair and non-deceptive advertisements or face potential legal charges. The FCA noted that some companies might secure approval for the deadline set in January 2024, due to uncertainties about the regulations, but it remains uncertain if Binance intends to seek this extension. Firms like MoonPay and OKX have already declared their intention to adhere to the FCA's rules.
Published At
10/10/2023 3:30:00 PM
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