Binance Temporarily Ceases New Customer Onboarding in Response to FCA Restrictions on UK Partner

In response to restrictions placed on its UK-based operating partner by the Financial Conduct Authority (FCA), Binance, one of the world’s largest cryptocurrency exchanges, has announced a temporary suspension of new customer registrations in the United Kingdom, effective from October 16, 2023.

The Financial Conduct Authority (FCA) in the UK has reinforced its promotional regulations, now requiring all digital asset service providers to integrate clear risk warnings for services directed towards UK-based traders. Meeting communication standards and complying with these regulations is now a prerequisite for approval by the FCA.

These stricter regulations come with significant penalties for non-compliance, including being added to the regulator’s cautionary list, fines, and even potential jail time for violators. 

On October 8, several major exchanges, including Huobi, KuCoin, and others, found themselves added to the FCA’s warning list.

In an attempt to adhere to these stringent regulations and gain FCA approval, Binance had engaged Rebuildingsociety.com, a peer-to-peer lending platform, to assist in adhering to FCA rules on marketing communications targeting UK-based customers. 

However, the FCA restricted Rebuildingsociety.com’s authority to approve communications for crypto platforms, instructing the firm to retract all existing approvals, including those of Binance.

Binance responded to this situation by asserting its proactive approach. The exchange stated, “We are working closely with the FCA to ensure that our users are not harmed by these developments” and actively seeking another suitable FCA-authorized firm to approve its financial promotions.

🚨 BREAKING: 🇬🇧 UK BLACKLISTS Over 140 #Crypto Exchanges Including MAJOR Players 😱

🇬🇧 What does this mean for YOUR Crypto? 😳

A thread 🧵 pic.twitter.com/AlSOEOeQUV

— Keyur Rohit (@CryptoKingKeyur) October 9, 2023

Impact on Existing Binance UK Clients

For existing Binance clients in the UK, the platform will remain accessible if they have previously completed the “Investor Declaration and Appropriateness Test.” However, during this transition, they won’t be able to access any new products or services that Binance may introduce.

The FCA’s continuous updates and strict approach to cryptocurrency advertising and promotions emphasize the need for both service providers and users to stay vigilant and compliant within this dynamic regulatory environment.

Binance’s temporary suspension of new customer onboarding in the UK signifies the growing regulatory scrutiny on the platform and its CEO, Chanpeng Zhao. 

This development comes amid an ongoing legal battle with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) regarding allegations of unregistered exchange operations.

The crypto industry, characterized by its rapid evolution and regulatory challenges, demands constant adaptation and proactive engagement to ensure compliance and a stable trading environment for all stakeholders. 

The temporary halt on new customer onboarding in the UK reflects Binance’s commitment to compliance and collaboration with regulatory bodies. The exchange aims to ensure the protection of its users and the continued growth of the cryptocurrency ecosystem amidst the evolving regulatory environment.

UK update https://t.co/7ET9J6KTj4

— CZ 🔶 BNB (@cz_binance) October 6, 2023