Binance announced on Monday, 16 October 2023, that it would cease accepting new users from the United Kingdom. The decision came into effect at 5 p.m. UK time.
The move follows the UK’s Financial Conduct Authority (FCA) imposing legally binding requirements on Binance’s former partner, Rebuildingsociety.com Ltd (REBS), on 10 October 2023. As a result of these requirements, REBS was no longer able to approve financial transactions. Consequently, REBS had to withdraw all existing approvals of financial promotions on behalf of any crypto asset businesses, including Binance.
Binance discussing with another potential partner
A spokesperson from Binance stated that the company is
“in active discussions with another suitable FCA-authorized firm to approve our financial promotions as soon as possible”.
However, until a new partnership is established, Binance has had to limit its services in the UK.
The FCA’s decision is part of a broader regulatory tightening around crypto assets. The UK’s financial promotions regime was expanded on 8 October to include crypto asset service providers, regardless of their location. All crypto platforms are now required by the regulator to display clear risk warnings to UK-based consumers and meet higher technical standards.
Penalties for non-compliance
Penalties for non-compliance include being added to the FCA’s public warning list, unlimited fines, and even prison time. This regulatory change has already impacted other crypto firms. Exchanges Huobi and KuCoin were among more than a hundred companies added to the watchdog’s warning list in the first 24 hours of it going live earlier this month.
Binance’s decision to halt new registrations in the UK underscores the challenges faced by crypto exchanges in navigating complex and evolving regulatory landscapes. It also highlights the importance of robust partnerships with authorized firms to ensure compliance with local regulations.
Out of reach to new users
While existing UK users will maintain access to their current services assuming they’ve met the necessary conditions, the move puts Binance out of reach for new users in one of the sector’s biggest markets outside of the US. This sets the stage for a battle by Binance to return to this significant market.
As Binance navigates these regulatory challenges, it will be interesting to see how this situation evolves and what impact it will have on the broader crypto market in the UK and beyond.