In a significant development, Binance, the leading global cryptocurrency exchange, has announced it will stop accepting new UK users from Monday. This decision comes in response to the UK's Financial Promotions Regime for qualifying crypto assets, which allows overseas companies like Binance to promote their crypto businesses in the UK, provided they collaborate with a firm authorized by the Financial Conduct Authority (FCA).
The FCA recently tightened its control over cryptoasset promotions and took regulatory action against rebuildingsociety.com (REBS) and similar firms on October 8, 2023. These firms were barred from approving financial promotions for entities like Binance. REBS had been working with Binance for this purpose, but due to the FCA's legal requirements, REBS is no longer able to approve financial promotions.
As a result of these regulatory actions, Binance has had to withdraw its existing promotion approvals and is now actively seeking a new FCA-authorised entity to approve its financial promotions. During this transition period, Binance will impose some restrictions and withhold new products and services from UK users.
Existing users who have completed their Investor Declaration and Appropriateness Test will maintain access to current services. The move comes as part of Binance's efforts to comply with the FCA's regulations and avoid potential penalties, including two years imprisonment or an unlimited fine for violators of the regime.
This development signifies an escalation in worldwide regulatory scrutiny of the cryptocurrency industry, following high-profile collapses in the sector. Binance is working diligently with the FCA to reduce and prevent consumer harm from investing in high-risk crypto assets.
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