Barclays Halts Transfer of Funds to Binance Exchange

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In Brief
  • London-based bank Barclays has stopped transferring the funds of its U.K. customers to Binance.

  • This comes after the Financial Conduct Authority (FCA) issued a consumer warning against the exchange.

  • So far, only five crypto firms have registered with FCA, meeting the anti-money laundering compliance.

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London-based bank Barclays has stopped transferring the funds of its U.K. customers to the Binance cryptocurrency exchange.

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This comes after the Financial Conduct Authority (FCA) issued a consumer warning against Binance. It also decreed that the exchange was not authorized to undertake crypto business within U.K. borders. Barclays said the cessation of debit and credit payments to Binance would start immediately, intending “to help to keep your money safe.”

“This action does not impact on the ability for customers to withdraw funds from Binance,” the bank said, “The decision has been taken following the FCA warning to consumers.”

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Binance issues

Last month, the FCA issued a formal consumer warning about Binance. It also banned Binance from regulated financial activities, like arranging conventional investment deals. The regulator said that the exchange did not have the authorization to conduct crypto operations in the UK.

This scrutiny has been spreading to other countries as well. One executive who formerly worked with Binance said that it “talks a big game on anti-money laundering and know-your-customer” rules, but was “resistant to throwing human resources at compliance issues.”

Binance said it is “categorically untrue” that it lacks sufficient compliance capacity.” It added that it takes its “legal obligations very seriously.” It said that it was “disappointed that Barclays appears to have taken unilateral action.” Binance rather “would welcome a dialogue with Barclays to discuss any concerns that they have.”

FCA clampdown

So far, only five crypto companies have successfully registered with the FCA, successfully meeting anti-money laundering (AML) compliance. While several dozen are still waiting on approval, many others have withdrawn their applications for approval. The FCA even went so far as to issue consumer warnings against 111 of these unregistered crypto companies. 

Additionally, a deadline for a temporary exemption to continue operating while waiting for approval was recently extended to March 2022. The FCA said this was because so many firms had been rejected or withdrawn their applications due to not meeting the necessary know-your-customer and AML regulations. However, despite the regulatory uncertainty, the FCA also acknowledged that crypto adoption in the U.K. is growing.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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