Cryptocurrency exchange Binance has halted the acceptance of new clients in the UK, a move prompted by recent regulatory decisions that have curtailed its marketing activities within the country.
The announcement of this decision came just hours before its implementation on October 16, 2023, and was a direct consequence of the Financial Conduct Authority (FCA) thwarting Binance’s efforts to conform to the stringent new industry standards. These standards, which went into effect earlier in October, are some of the most rigorous globally, underscoring the FCA’s commitment to enhancing consumer protection, particularly in the aftermath of the previous year’s digital asset market downturn and the failures of companies like FTX.
Under the newly established regulations, only authorized entities are permitted to promote cryptocurrency advertisements in the UK. Non-compliance with these rules carries the potential for significant fines and the possibility of imprisonment for up to two years, applying universally to companies, both domestic and international, operating in the UK. Within the first week of the regulatory framework’s introduction, the FCA issued more than 150 warnings regarding unauthorized promotions by cryptocurrency groups.
It’s worth noting that Binance previously encountered regulatory challenges in 2021 when the FCA instructed the exchange to cease all regulated activities in the UK due to its failure to respond to basic inquiries.
Prior to these recent developments, Binance had formed a partnership with Rebuildingsociety.com. However, last week, the FCA determined that this Leeds-based firm was prohibited from promoting crypto services in the UK, effectively hindering Binance’s lawful marketing activities in the country.
In response, Binance issued a statement indicating that discussions were underway with another FCA-authorized entity to expedite the approval of their financial promotions. While existing Binance customers will continue to enjoy access to services without interruption, no new products or services will be introduced during this interim period. This latest development adds to a series of challenges Binance has faced this year, including legal disputes with the US SEC and the Commodity Futures Trading Commission.
