Binance Faces Hurdles in Rebuilding Presence in UK amid Regulatory Challenges

Binance, the world’s leading cryptocurrency exchange is facing challenges in rebuilding its presence in the UK after exiting the market last year. According to a recent Bloomberg report citing people familiar with the matter, the company has been unable to secure a licensed partner in the British region to enable it access the UK market.

Binance Rejected by Three UK Partners

Last year, the company withdrew its license application to register with the UK authorities as a digital asset service provider in June.

Few months later in October, Binance announced that it would stop accepting new users from the UK after the country’s financial regulators established new rules restricting foreign companies from advertising their digital assets, products, and services without authorization.

The UK Financial Conduct Authority (FCA) said at the time that crypto firms such as Binance are not allowed to advertise their products to consumers in the region unless they have an authorized participant to approve the promotions. The authorities banned Binance’s then partner Rebuildingsociety.com (REBS) from operating in the region, leading to the exchange’s exit.

Now, Binance is looking to re-enter the market to expand its global presence. However, according to Bloomberg sources, the company is struggling to secure new partners with FCA approval.

The sources revealed that in recent months, the company has faced rejection from at least three firms to endorse its re-entry, in compliance with the FCA rule.

Binance Refutes Claims of Facing Challenges

Binance, however, refuted claims of encountering difficulties in securing a new partner. In a statement to Bloomberg, the exchange said that it is inaccurate to say that they have been rebuffed by section 21 approvers in the UK.

“It is not accurate to say that we have been rebuffed by section 21 approvers in the UK. We continue to have productive conversations with potential approvers and are confident that we will be able to provide a positive update soon,” the company’s spokesperson told Bloomberg.

While the company is trying to re-enter the UK market, Binance is facing regulatory challenges in the United States.

Last year, the exchange entered into a $4.3 billion settlement deal with the country’s federal regulators including the Commodities Futures Trading Commission (CFTC) and the  Department of Justice (DOJ).

As part of the agreement, the company’s founder, Changpeng Zhao (CZ) who served as the chief executive officer stepped down from the role and is currently facing prison time in the US. His sentencing is scheduled for late February.

Binance.US, the company’s American subsidiary, has been suspended from offering services in two US states: Alaska and Florida.

The Florida Office of Financial Regulation filed a court document expressing concerns about the exchange posing an “immediate danger” to the public. The regulator said the suspension is part of its efforts to protect the public while maintaining procedural fairness.

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2024-02-02 15:03