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Binance Re-enters UK Payment System, FCA Raises Concerns

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FCA – Financial Conduct Authority, UK’s apex financial regulator is worried over Binance access to UK’s payment networks.

In response to the recent steps taken by the estranged digital exchange platform to re-enter the UK’s digital payment system, FCA has displayed resentments and worries over such a move. This report was published by the Financial Times.

June 2021, FCA restricted Binance from offering its payment services in the UK as a result of its gross disobedience to basic rules and regulations guiding financial practices in the UK. 

In a swift move, Binance indirectly re-entered the UK’s payment system by partnering with a payment institution, regaining restricted access to sterling payments.

An Embattled Binance

Binance has been cracked down by the apex financial regulatory bodies of various countries. With reckless abandon, Binance grossly flouted the established financial rules and regulations of these countries. Thus, the crackdown was necessary, to serve as a deterrent to the irresponsible way Binance carries out its financial activities in those countries.

However, the digital assets trading and exchange platform Binance Group, had its worst case scenario in the UK, as FCA completely closed down its financial activities in the country. 

The apex financial regulatory body reiterated its stance and revealed that Binance Markets Limited does not have a written consent or any form of approval from them to participate in any financial regulated activity in the country as it is doing now

Consolidating the closure, FCA issued a serious public warning to local consumers, maintaining that Binance and its subsidiaries were illegally operating in the UK financial markets as they are not authorized by the apex regulatory body to offer financial services to the public.

Acting on Binance ban by FCA, most UK financial service providers immediately strained their long relationship with binance. Financial service providers such as Barclays and HSBC (Europe’s biggest bank) stopped credit/debit card transfers and payments, which has been a point of contact between them and Binance.

Binance on the other hand, restricted deposits made in Euro via the Single Euro Payments Area (SEPA).

A Backdoor Re-entry

In its inquisitiveness, Binance gained access to offer financial services in the UK’s financial system through the backdoor, by partnering with Paysafe – a local London-based payments company. Through this partnership, Binance customers in the UK can now make deposits via the Faster Payments Services.

This singular action by Binance proves that their press releases which claimed that they are on “peace talks” with the apex financial regulator did not sail through.  

That notwithstanding, the FCA concerns or warning probably may not hold water regarding the current circumstances in which Binance operates on. Considering its global nature, and the fact that Binance is not directly offering derivatives in the UK financial markets, FCA rules and regulations may not apply to them.

However, FCA has discouraged and warned Binance customers in the UK on the implications of using the platform. The agency stated that the UK laws are under no obligation to protect them in the event of an unfortunate occurrence.

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