According to Article 21, the British Financial Conduct Authority (FCA)’s new regulations on cryptocurrency promotion came into effect on October 8 last year. Under this regulation, unregulated overseas digital asset service providers, such as Binance, must cooperate with companies authorized by the FCA to promote digital asset services in the UK. This regulation aims to strengthen supervision of the digital asset market to protect investors from potential risks.
But after the British Financial Conduct Authority terminated Binance’s cooperation with P2P lending company Rebuildingsociety.com, Binance announced in October last year that it would suspend accepting new users and stop providing new products or services.
Bloomberg reported that Binance recently hoped to return to the British market, but encountered some difficulties. According to people familiar with the matter, Binance has made requests for cooperation to at least three British companies authorized by the FCA to oversee communications between cryptocurrency platforms and customers. However, they all rejected Binance’s request.
Two people familiar with the matter revealed that the British Financial Conduct Authority had asked several authorized companies about cooperation with Binance and expressed concerns before Binance’s potential partners rejected it.
The position of the UK Financial Conduct Authority shows that Binance’s new CEO Richard Teng faces huge challenges. In November last year, Binance reached a settlement agreement with the U.S. Department of Justice and other agencies, agreeing to pay a $4.3 billion fine. This led to Binance founder Changpeng Zhao resigning as CEO and being replaced by Richard Teng. He is now working to rebuild the trust of global regulators in Binance to restore its reputation. This is undoubtedly a difficult task for Teng.
Binance denies regulatory resistance
Binance has denied reports that its efforts to return to the UK market have encountered obstacles. Binance said in an emailed statement that claims that Binance was rejected by UK Section 21 businesses are inaccurate. Binance will continue to have productive conversations with potential approved businesses and believes Binance will provide positive updates soon.
Binance faces legal woes in the United States, an issue that has been a major obstacle to its global operations. As early as 2021, the British Financial Conduct Authority warned consumers not to use Binance services because Binance's global structure is opaque, preventing the company from being effectively regulated.
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