FCA blocks Binance partner from approving crypto ads
Binance’s recent endeavors to align with the U.K.’s new marketing regulations for crypto companies have hit a roadblock. The Financial Conduct Authority (FCA), the U.K.’s chief financial regulator, announced on Tuesday that Rebuildingsociety.com, Binance’s U.K. partner, does not have the authority to approve cryptocurrency advertisements.
The announcement poses challenges to Binance’s efforts to navigate the recently introduced crypto promotional rules. Just last week, Binance revealed its partnership with Rebuildingsociety.com, strategically timed ahead of the implementation of these new regulations.
Additionally, Binance introduced a new domain for its users in the United Kingdom, www.binance.com/en-GB, to offer access to products and services that comply with the new marketing rules. These services include fiat and crypto deposits and withdrawals, spot trading, margin trading, Binance Pay, and crypto loans, among others. However, some Binance services will no longer be accessible to users in the UK, including Binance gift cards, academy, research, feed features, and referral bonuses.
Under the new set of rules, which took effect over the weekend, cryptocurrency companies wishing to run their promotions and advertisements need to be registered with the FCA. This registration would allow these companies to autonomously approve their marketing materials. However, for those crypto entities not registered with the FCA, there is a provision permitting their ads to be sanctioned by firms that are authorized by the regulatory body.
Binance, through its partnership with Rebuildingsociety.com, intended to tap into this latter provision, but the FCA’s latest statement jeopardizes those plans.
The crypto giant’s collaboration with Rebuildingsociety.com was seen as a strategic move to ensure compliance with the evolving U.K. regulations while expanding its market reach. Now, with this unforeseen regulatory challenge, Binance may need to reassess its strategy for the U.K. market.
“We have used our powers under section 55L of the Financial Services and Markets Act (FSMA) to impose these restrictions. The FCA can impose requirements on a firm in circumstances where it concludes that it is necessary to do so to advance one or more of the FCA’s operational objectives, which includes securing an appropriate degree of consumer protection,” the statement reads.
Interestingly, Binance Markets Limited (BML), the UK subsidiary of Binance, canceled its unused permissions granted by the Financial Conduct Authority (FCA) in June.
As a result, the company can’t offer regulated activities and products, as confirmed by a statement issued by the regulator. Binance’s UK arm has voluntarily requested the withdrawal of its registration and the process was finalized on May 30, 2023, and is now reflected on the FCA Register.
It remains to be seen how Binance will maneuver through this setback, and whether it will seek another partner or adjust its marketing strategy to fit within the FCA’s guidelines.