Binance, the world’s largest cryptocurrency exchange has announced it has stopped accepting new users in the United Kingdom as of 5 p.m. local time on October 16.
The move came after Britain’s financial watchdog the Financial Conduct Authority (FCA) imposed new rules on October 8 that require crypto firms to register with the agency and have their marketing campaigns approved by an FCA-authorized firm.
UK Customers Cannot Sign Up To Binance Until Further Notice
Binance employed Rebuildingsociety.com Ltd, an online peer-to-peer lending platform, to have its advertisements and promotions approved in the UK. However, last week the FCA added the exchange’s partner to the list of regulated firms that are banned from promoting crypto-related services in the country.
The FCA’s updated crypto guidelines also require exchanges to provide fair warnings to customers about the risk involved with investing in crypto products.
Binance went on to launch a new website dedicated to its British customers and resumed operations of its mobile app after it was temporarily halted. The company also asserted its compliance with the new Financial Promotions Rules.
In an email to users, the crypto exchange said the new domain will now only show Binance products and services that can be offered in compliance with the FCA regulations. These include:
However, the updated crypto promotion rules do not allow UK retail customers to make use of Binance’s Gift Cards, Academy, Research, Feed, and Referral Bonus options.
Although Binance still continues to work with RebuildingSociety.com, it said on Monday that it is currently looking for a new FCA-authorized approver so that its platform could comply and continue to register UK customers.
Binance added that it is “working closely” with the financial regulator to ensure that British users are not harmed by the recent developments and is looking to find a suitable firm to approve its financial promotions “as soon as possible”.
Binance Facing Increased Regulatory Scrutiny in the UK, Europe, and the US
2023 has been a tough year for the leading crypto exchange as it is faced with mounting regulatory scrutiny across the world. In the UK, the platform’s users have already lost the ability to make deposits and withdrawals in British pound sterling (GBP), and also terminated its partnership with the European banking partner, Paysafe Payment Solutions
Binance’s UK-based fiat on-or-off ramps partner Skrill Limited, a Faster Payments Service transactions operator, announced in March that it will no longer support the crypto exchange, resulting in the platform losing GBP support. As of now, British customers are unable to open accounts on the exchange with GBP deposits but existing users can access their balances in the fiat currency.
Last month, Paysafe, the parent company of Skrill, announced it would no longer be providing EUR deposits and withdrawals via bank transfer to Binance users in the European Economic Area (EEA). Customers from the region now have to resort to using other currencies supported by the exchange to make deposits or withdrawals in fiat.
In June, Binance deregistered its listing with the Cyprus Securities and Exchange Commission ahead of the EU’s Markets in Crypto Assets (MiCA) legislation, which is set to become law next year. That same month the company said it was exiting the Netherlands after failing to secure a virtual asset service provider (VASP) license from the Dutch central bank. Binance ended up transferring its business and assets in the country to domestic rivals Coinmerce in July.
Meanwhile, French regulators are investigating Binance for a number of offenses including “aggravated money laundering”, and the US Securities and Exchange Commission (SEC) has filed a lawsuit against the company alleging that it had violated federal securities laws by selling unregistered securities in the form of cryptocurrencies to customers.
Binance hopes to use its new partner to allow users in the UK to view its products and services through a localized domain, as the exchange is not registered with the FCA.
Other Crypto Firms are also Compliant with the Updated Financial Promotion Rules
American crypto exchange Coinbase, peer-to-peer financial services company Revolut, Japanese digital asset custody firm Koimanu, and crypto hard wallet service provider Ledger, have procured the FCA license to continue operations in the UK. At the same time, ByBit and Luno, have decided to suspend operations and are exploring other options, a potential exit is also on the cards for both crypto platforms.