Binance Payments Partnership Raises Regulatory Red Flag in the UK

17 February 2022, 12:30 GMT+0000
Updated by Kyle Baird
17 February 2022, 12:30 GMT+0000
In Brief
  • FCA is not happy with the partnership between Binance and Paysafe.
  • Paysafe offers faster fiat on-ramps and payments.
  • Binance UK is still under the regulatory spotlight.
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Financial regulators in the United Kingdom are growing increasingly concerned over Binance, the world’s largest digital asset exchange, and its local payment partners.

Britain’s Financial Conduct Authority (FCA) has raised concerns about a deal that will give Binance access to the local payments provider Paysafe.

The regulator has stated that it has limited powers to object to Binance’s partnership with the London-based payments network, according to reports.

The FCA ordered Binance to cease all regulated activity in the country last year and continues to express concern over the high-risk investment products the exchange offers.

A number of high-street banks blocked their customers from sending money to the exchange following the crackdown.

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Payment partner worries

The deal with Paysafe would allow crypto investors to send fiat to Binance through the Faster Payments Service, a network for faster and more efficient payments between U.K. banks.

The regulator is clearly not happy with more convenient fiat on-ramps for crypto exchanges in the U.K. An FCA spokesperson said “Our concerns about Binance remain. We received a notification of this business partnership but have limited powers to object to arrangements of this kind.”

Paysafe argued that it was a reputable payments partner with full regulatory compliance, a spokesperson added:

“We take our regulatory obligations extremely seriously and comply with the highest industry standards. We always adopt a fully transparent approach when dealing with regulators.”

Binance U.K. customers were asked for more personal details in December if they wanted to continue trading derivatives. A similar KYC (know-your-customer) crackdown was implemented by the exchange for EU customers recently who were also required to supply a raft of identification and financial details to keep their accounts.

Binance angst continues

Binance Markets Ltd, the firm’s U.K. branch, was accused by the FCA of failing to respond to questions about the group in August 2021.

The company stated that it has tried very hard to work with regulators, with a spokesperson stating, “We have worked hard to build a robust compliance programme that incorporates anti-money-laundering principles and tools used by top financial institutions.”

Binance is also attracting regulatory attention across the Pond. As reported by BeInCrypto yesterday, the U.S. Securities and Exchange Commission has launched a probe into two trading companies that have ties with Binance CEO Changpeng Zhao.

Being the largest cryptocurrency exchange in the world with a daily spot trade volume of $11.7 billion is bound to attract the attention of rapacious regulators.

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.