In response to recent regulatory developments, Binance, the world’s largest cryptocurrency exchange, has announced a temporary halt in accepting new users from the United Kingdom.
This decision comes as a result of restrictions imposed by the Financial Conduct Authority (FCA) on its UK promotions partner, Rebuilding Society, in compliance with the new cryptocurrency promotions rules introduced by the FCA.
Binance disclosed in an official statement that it is actively searching for a new FCA-authorized partner in the UK. However, until a new partner is secured and financial promotions are reapproved, certain temporary restrictions will affect its platform and mobile app for UK users.
Existing users who have completed the “Investor Declaration” and the “Appropriateness Test” in accordance with the new regulations will continue to have access to their current services. Nevertheless, new products and services will remain unavailable for UK users during this period.
The exchange emphasizes its commitment to working closely with the FCA to ensure that users are not adversely affected by these developments. Binance will maintain risk warnings and encourage UK users to review its “info” tab before engaging in specific cryptocurrency investments.
The brief partnership between Binance and Rebuilding Society, a peer-to-peer lending firm, which was announced on October 8, lasted only a couple of days. On October 11, the FCA imposed binding restrictions on Rebuilding Society, preventing it from approving financial promotions for cryptocurrencies.
This abrupt change came after the FCA updated its Financial Promotions Regime requirements, stating that unauthorized entities could no longer endorse crypto-related promotions.
In response to this regulatory shift, Binance emphasized its dedication to complying with the UK’s Financial Promotions Regime and claimed to have taken significant measures to adhere to the updated requirements.
The company partnered with Rebuilding Society to meet its obligations and had shared this agreement with the FCA a week before the new regulations took effect. Unlike many other firms that received warnings from the FCA for non-compliance, Binance remained in compliance with the requirements.
The FCA’s new rules for cryptocurrency promotions, which came into effect on October 8, permit entities already registered or authorized by the FCA to approve financial promotions for unregulated firms, such as Binance.
The regulator warned that unregistered crypto asset firms failing to comply with these guidelines could be in violation of the UK’s Financial Services and Markets Act 2000, constituting a criminal offense punishable by imprisonment of up to two years, an unlimited fine, or both.