By George Ward
Due to regulatory directives, the world’s largest crypto exchange is struggling to reestablish its footing in the United Kingdom. At least three regulated partners have reportedly turned down Binance’s move to offer crypto services to UK consumers.
Needing An Approver
Per multiple reports, Binance has difficulties building new agreements to reenter the United Kingdom and resume its operations. Before it can restart operations in the UK, the crypto giant must secure an approver, as required by the regulatory environment.
The Financial Conduct Authority (FCA) grants this license to ensure that the entity responsible for overseeing financial promotions follows FCA laws before making their products available to the public. However, Binance is struggling to find a regulated entity for partnership. Reports indicate that at least three entities with regulatory approvals have declined the crypto exchange’s requests.
Given the FCA’s October suspension of the exchange’s prior UK partner, Rebuildingsociety.com (REBS), having a new approver is crucial to its UK reentry. Recall that the conditions the FCA imposed on the previous approver led to the termination of Binance’s engagement with its counterpart in the United Kingdom. Thus, Binance continues its struggles to reintegrate itself into the UK crypto market.
FCA’s Prohibition And Binance’s Denial
In response to the FCA’s prohibition on REBS promoting Binance’s products and services, Binance was forced to freeze new user registrations and seek an alternate approver. A consequence of the FCA’s decision is that it has unintentionally discouraged prospective businesses from partnering with the cryptocurrency exchange.
However, Binance has issued an official statement and denied facing difficulties in securing a new partner. The exchange also claims that ongoing discussions with prospective approvers yield positive results, and it intends to offer an updated status report soon.
Binance ended its operations in the UK in May 2023 through its subsidiary, Binance Markets.
The move followed an FCA official statement that the popular crypto exchange didn’t have the requirements to offer its services in the UK.
Binance’s Overseas Legal Battles And The UK Connection
Meanwhile, some industry observers believe Binance’s struggles in the United Kingdom may be due to the exchange’s legal entanglements abroad. The US Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its former CEO, Changpeng Zhao, in June 2023.
The lawsuit claimed that Binance had offered unregistered securities in the United States and engaged in wash trading, among other allegations. In response to these legal issues, Zhao confessed to breaching US anti-money laundering regulations.
Then, the firm reached a $4.3 billion deal with the US Department of Justice. Furthermore, he agreed to resign as CEO of Binance in November 2023. Zhao’s sentencing is expected in late February, which would mark the end of these judicial proceedings.
Hence, some observers opined that these international legal difficulties contributed to the complexities Binance is currently experiencing in the UK market. They also claim that the firm could have similar issues in other jurisdictions.