FCA restricts Binance’s UK partner from approving crypto ads
- The move comes just days after the FCA’s new requirements for crypto firms came into effect.
- The FCA also urged the platform to withdraw any advertisements offering to approve such financial promotions and confirm its adherence to these requirements in writing.
The Financial Conduct Authority (FCA) of the United Kingdom has imposed restrictions on Rebuildingsociety, a peer-to-peer lending platform that has partnered with the crypto exchange giant, Binance [BNB], to comply with its marketing regulations.
The move comes just days after the FCA’s new marketing requirements for crypto firms came into effect on 8 October. Under these new regulations, crypto companies were expected to form partnerships with local entities to achieve compliance.
Binance collaborated with Rebuildingsociety to ensure the exchange could serve its UK users and provide a localized experience, even though it lacked registration with the FCA.
On 10 October, the FCA issued an official notice, explicitly stating that Rebuildingsociety lacked authorization to “approve the content of any financial promotion for a Qualifying Cryptoasset for communication by an unauthorized person.”
In essence, the FCA raised concerns about the platform’s ability to endorse and oversee the content of financial promotions for cryptocurrency, calling into question its compliance with the newly enacted regulations.
The FCA also went on to instruct Rebuildingsociety to notify its clients, including Binance, that it lacked the authorization to approve the content of any financial promotion for a Qualifying Cryptoasset.
Furthermore, the FCA urged the platform to withdraw any advertisements offering to approve such financial promotions and confirm its adherence to these requirements in writing.
FCA’s move puts Binance’s UK operations in jeopardy
This sudden development has raised questions about Binance’s future prospects in the UK market. The partnership with Rebuildingsociety was a strategic move to navigate the FCA’s marketing regulations and provide UK users access to Binance’s products and services through a localized domain.
With this partnership now in question, the situation has become uncertain for the cryptocurrency exchange in the UK.
It is worth noting that Binance had recently unveiled its partnership with Rebuildingsociety, intending to use it as a means to market various products and services, including spot trading and nonfungible tokens, to their UK user base.
As part of their compliance with the FCA’s marketing regime, Binance also decided to discontinue referral bonuses and gift cards, aligning with the regulator’s vision of promoting transparent and fair advertising.
The FCA’s marketing regulations, which were initiated on 8 October, are aimed at ensuring that firms, including those operating in the cryptocurrency space, maintain advertising that is “clear, fair, and not misleading.”
Failure to adhere to these guidelines could result in criminal charges, indicating the seriousness with which the FCA views these marketing practices.
Moreover, the FCA mentioned that certain companies might receive approval extensions, allowing them more time to meet the requirements by January 2024, considering the uncertainty surrounding the rules. However, it remains unclear whether Binance has plans to seek such an extension.
Binance is not the only crypto company navigating these new regulations. Others, such as OKX and MoonPay, have already declared their intention to comply with the FCA’s rules, demonstrating a collective effort within the industry to adapt to the changing regulatory landscape.