UK Finance Authority Expresses Concern Over Binance Bifinity and EQONEX Partnership

8 March 2022, 09:21 GMT+0000
Updated by Kyle Baird
8 March 2022, 09:22 GMT+0000
In Brief
  • The FCA published a notice expressing its concerns.
  • Bifinity issued a $36 million convertible loan to EQONEX.
  • The partnership will see the use of EQONEX’s Digivault, which is an asset custody solution.
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The Financial Conduct Authority of the U.K. has raised concerns over the recent strategic partnership between Bifinity and EQONEX. The authority said it has the authority to cancel or suspend the registration of a crypto asset business if it deems it a risk.

The United Kingdom’s Financial Conduct Authority (FCA) expressed concerns over a recent strategic partnership between financial services company EQONEX and Binance subsidiary Bifinity. The FCA said that there are concerns relating to the undertaking of regulated activities in the region.

The two entities announced the partnership on March 7, also stating that it would result in the issuance of a $36 million convertible loan from Bifinity to EQONEX. The partnership is focused on leveraging EQONEX’s custody solution Digivault

“as an FCA regulated custodian, strengthening the technology supporting the EQONEX Exchange, and expanding Bifinity’s geographical footprint through EQONEX’s licensing framework.”

The FCA said that the loan means that Bifinty has specific contractual rights over EQONEX. While Digivault is registered under the FCA’s Money Laundering Regulations, the authority says that,

“Individuals and entities that are part of the Binance Group may have become beneficial owners of Digivault for the purposes of the MLRs.”

However, the FCA is firm on its decision that Binance should not undertake activities without written consent. The FCA believes that the risky nature of Binance’s products could drastically affect consumers.

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With that in mind, the FCA says that it can take steps to suspend or cancel the registration of a crypto asset business if it deems it a risk. This suggests that the EQONEX-Bifinity partnership could be rendered moot if the FCA sees the issues as a serious problem.

FCA not pulling punches on Binance

The FCA has been strict on Binance and its operations in the region. It issued a warning to consumers that Binance was not regulated and put a stop to its operations in the U.K. The FCA head has also said that crypto promotions need stricter regulation.

The authority has been taking a lot of steps to prevent consumer risk. Among these are warnings relating to fraudulent crypto ads.

Binance, meanwhile, has been dealing with scrutiny from governments across the world. As one of the world’s most popular exchanges, it is in the spotlight when it comes to regulations. Most recently, it halted operations in Israel following a request from the country’s financial regulator.

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.