Binance, the world’s largest cryptocurrency exchange, has suspended access to its platform for new users in the United Kingdom, starting from October 16.
This decision follows the termination of a partnership with a third-party firm responsible for approving communications, as required by the UK’s financial regulatory authority.
Effective from 5 p.m. London time on Monday, October 16, individuals in the UK who haven’t registered with Binance will no longer be able to create new accounts.
This move poses a significant challenge for the exchange as it aims to regain access to one of the most important cryptocurrency markets outside of the United States.
The regulatory changes driving this decision stem from the expansion of the UK’s financial promotions rules, which now apply to crypto asset service providers, regardless of their location. These new rules require crypto platforms to provide clear risk warnings to UK-based consumers and adhere to stringent technical standards.
Additionally, all communications must receive approval from a firm authorized by the Financial Conduct Authority (FCA). Non-compliance can result in severe penalties, including being listed on the FCA’s public warning register, substantial fines, and potential criminal charges.
To meet these requirements, Binance had initially enlisted peer-to-peer lending platform Rebuildingsociety.com to approve its communications with UK customers, including website content and app text.
However, the FCA recently restricted Rebuildingsociety.com’s authorization to approve communications for crypto companies, instructing the withdrawal of all previous approvals by October 11 at 5 p.m. London time.
Binance has revealed its intention to find a new firm authorized by the FCA to approve its financial promotions promptly.
The exchange stated, “We are working closely with the FCA to ensure that our users are not negatively affected by these developments and are actively seeking another suitable FCA authorized firm for approval.”
This latest development adds to the growing regulatory challenges faced by Binance and its CEO, Changpeng Zhao, globally. The company is currently involved in multiple legal disputes in the United States and Canada, along with an ongoing investigation by the US Department of Justice.
The Financial Conduct Authority had previously cautioned consumers against using Binance’s services, expressing concerns about the exchange’s complex organizational structure.
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As Binance navigates these regulatory challenges, its suspension of new UK user registrations highlights the increasing pressure on cryptocurrency exchanges to comply with stricter regulatory standards. This underscores the evolving landscape of the crypto industry.
As of the time of writing, the price of Binance Coin (BNB) stands at $219, showing a 1.3% increase over the past 24 hours and a 4.2% gain over the last seven days.
