Binance, one of the largest cryptocurrency exchanges in terms of trade volume and user base, has announced that it has stopped accepting new users to its platform until it finds a new FCA-approved partner that will perform the task of advertising the company’s products and services.
Those users who are already registered with the Binance exchange can continue to use its services as normal, but new users will have to wait until the exchange complies with the directives of U.K’s Financial Control Authority (FCA).
The UK regulators have been very critical of the workings of overseas exchanges ever since the collapse of some of the well-known crypto exchanges worldwide. The regulators don’t want to see a repeat incident where people lose millions due to regulatory oversight. Therefore, they have issued directives that, in essence, are made to regularize the workings of crypto exchanges in the country.
On 8th October 2023, the FCA rules regarding the promotion of crypto assets in the country came into effect. FCA declared that under the new rules, cryptocurrency would be classified as restricted mass market investment, which will require advertisers and promotors of cryptocurrency to highlight warning messages clearly regarding cryptocurrency, and they have also banned the promotion of incentives given to add new users to the exchange like referrals or new joiner bonuses.
FCA also announced that under the new regulations, firms that are registered with the FCA can approve their ads, while those that are not registered with the FCA can use the services of advertising companies that are authorized by the FCA to perform these services. Binance is not registered with the FCA, so it cannot conduct any promotion activities for its exchange inside the country.
Binance announced last week that it had formed a partnership with rebuildingsociety.com before these rules were to come into effect. The company’s goal behind this partnership was to get approval for its ad campaign from rebuildingsoceity.com. However, the FCA declared that the firm that Binance intended to use to get approval for its advertising activities was not authorized by the FCA for such tasks therefore, it was directed to withdraw any existing approvals for crypto promotions. The FCA has also given rebuidlingsoceity.com the deadline of Friday to submit in writing that they have complied with the FCA’s directive.
This isn’t the first incident where a crypto exchange has halted its activities inside the UK. Bybit announced back in September of 2023 that they would halt their operations inside the UK before 8 October 2023. The announcement was made in response to the regulatory changes made regarding crypto. From 8th October onwards, existing customers weren’t allowed to add funds, create new contracts, or increase their position sizes. They were, however, allowed to reduce and close their positions and withdraw their funds entirely from the platform.
Binance has acknowledged this recent news update on their website, where they have said that the exchange has stopped bookings of new users, and existing users can continue staying on the platform. However, their access to products and services will be restricted until the exchange finds a new FCA-authorized partner.
