Through their most recent legal framework on the cryptocurrency sector, UK officials have recently rejected Binance’s attempts to reach out to British consumers.
As a reaction to these modifications, Binance decided to suspend all new UK user registrations.
One of the biggest cryptocurrency exchanges in the world, Binance, has stated that it will stop accepting new members from the United Kingdom as of October 16. This choice was made in an effort to follow the most recent guidelines issued by the Financial Conduct Authority (FCA) of the UK.
The change in regulations, which went into effect on October 8, now allows businesses registered with the FCA to choose between self-approving their advertisements and hiring authorized third parties to review and approve their promotional content.
These regulations stand out for their emphasis on making sure that advertisements adhere to predetermined standards, which promotes a more secure and open investing environment.
Binance had first worked with Rebuildingsociety.com to manage the approval of its promotional content within the UK in anticipation of these changes. The FCA has since made it clear that Rebuildingsociety.com does not have the necessary permission to endorse cryptocurrency-related advertisements.
Binance responded by engaging the FCA in a proactive manner, stating that it was “working closely with the FCA to ensure that our users are not harmed by these developments” and that it was “looking to find another suitable FCA authorised firm to approve our financial promotions as soon as possible.”
The ramifications are slightly different for the UK-based Binance clients already in place. Users are permitted to continue using the platform’s services, but only once they have passed the “Investor Declaration and Appropriateness Test.” Additionally, during this transitory period, these users will temporarily not be able to access any fresh products or services that Binance may launch.
The FCA was pretty busy last week because it updated its list of unauthorized companies that customers “should avoid.”
143 new companies were added to the warning list, including important exchanges like Huobi-owned HTX and KuCoin. The warning list only states that “You should avoid dealing with this firm,” and offers no further noteworthy information regarding their hazards in the UK.
Michael Johnson, Head of Compliance at the UK-based digital asset as a service platform Zumo, has firsthand experience with the effects that these regulations are having on businesses and customers.
Johnson recently told CCN that many clients who possess cryptocurrency will no longer be able to acquire or trade due to some operators halting their UK activities.
As a result, he said, the company is now seeing a number of them seeking its support to help with their existing UK customers.
“The new regime has rightly limited the options on offer for unregistered firms operating in the UK,” he said.
Businesses and investors are in a state of upheaval as a result of the continuous struggle between cryptocurrency exchanges, regulatory agencies, and the larger financial ecosystem as they try to figure out how to deal with the laws.
UK cryptocurrency customers should be wary when selecting their service providers since in this cutthroat market, even well-meaning businesses like Binance can easily lose their place.