- Starting from October 16, new account registration on Binance is no longer available for unregistered individuals in the UK.
- Suspending new user registrations in the UK is due to regulatory changes in the financial promotion regime.
In a significant development that could impact the cryptocurrency market, Binance, the world's largest cryptocurrency exchange, has announced the suspension of platform access for new users in the United Kingdom. This is quite alarming.
However, the move comes in response to the termination of a partnership with a third-party firm responsible for approving communications on the exchange, as mandated by the UK's financial watchdog.
Let's dive deep into explaining the Binance UK ban and see if it will likely affect Binance UK users.
Binance restricts UK users
Effective from 5 p.m. London time on Monday, October 16, Binance no longer allows individuals in the UK who haven't registered with the platform to create new accounts.
Meanwhile, this decision poses a challenge for Binance as it strives to regain access to one of the largest cryptocurrency markets outside of the United States.
Regulatory changes and compliance requirements
The decision to suspend new user registrations in the UK is a direct result of regulatory changes regarding the UK's financial promotion regime.
However, these changes now extend to all crypto asset service providers, regardless of their jurisdiction. In compliance with the new rules, all crypto platforms must prominently display clear risk warnings to UK-based consumers while meeting strict technical standards.
This would make UK users aware of the risks involved in investing in cryptocurrency before going into cryptocurrency trading or investment. Moreover, any communications must receive approval from an FCA-authorized firm.
Failure to comply with these regulations carries severe penalties, including being listed on the FCA's public warning register, facing unlimited fines, and even potential criminal charges. This is one of the penalties for not meeting the standard.
Search for a new communications approver
To ensure regulatory compliance, Binance had previously enlisted the services of peer-to-peer lending platform Rebuildingsociety.com.
However, the FCA has recently restricted Rebuildingsociety.com's authorization and demanded the withdrawal of all prior approvals for crypto companies.
Thus, in response, Binance has expressed its intention to engage a new approver for its communications as soon as possible while working closely with the FCA to protect its users from any harm resulting from these developments.
Further regulatory scrutiny for Binance
While facing a lot, this latest setback adds to the growing global regulatory scrutiny faced by Binance and its CEO, Changpeng Zhao.
Currently embroiled in legal disputes in the United States and Canada, Binance is also facing an ongoing investigation by the US Department of Justice.
This Is just too much for Binance, as it is facing and battling with regulations, standards, and policies to remain in the game of cryptocurrency as a platform for trading bitcoin and other cryptocurrencies.
As the world's leading crypto exchange, Binance's decision to halt onboarding new UK users reflects the increasing regulatory challenges faced by the industry.
Thus, raised concerns surrounding compliance with the UK's financial promotions regime and the termination of its partnership with Rebuildingsociety.com highlight the need for Binance to find a suitable FCA-authorized approver for its financial promotions.
Meanwhile, this situation underscores the significance of navigating regulatory environments for any crypto company operating in global markets.