Cryptocurrency exchange Binance has halted the onboarding of UK customers amid a regulatory crackdown from Britain’s financial watchdog.
Binance announced on Monday evening that it would not take on new customers in the UK, giving them a one-hour notice of the change.
The world’s largest crypto exchange had been exploring its options to provide its services in the UK amid significant scrutiny from the Financial Conduct Authority (FCA).
Earlier this month, the FCA expanded financial promotion rules to include cryptoassets, which requires firms intending to market crypto services in the UK to do so with the approval of the financial regulator.
Under the new rules, advertising crypto investments without the approval of the FCA is “a criminal offence punishable by up to two years imprisonment, the imposition of a fine, or both,” said Abdul Motobbir, senior compliance consultant at the corporate and fiduciary services company Octorian.
The move saw 146 security alerts from the FCA within the first 24 hours of its enforcement.
In response, Binance partnered with the FCA-authorised firm Rebuildingsociety.com to “ensure we can continue to offer services in the UK in compliance with these updated rules”.
As Rebuildingsociety.com was already authorised to market crypto opportunities in the country, Binance intended to promote its services via the third party.
Last week, however, the strategic move was blocked by the FCA, which added Binance’s new partner to a list of firms prohibited from promoting crypto investments.
Binance said: “We have disclosed to the FCA that we are in active discussions with another suitable FCA-authorised firm to approve our financial promotions as soon as possible.”
The crypto giant has frequently clashed with the UK financial regulator, which banned the company from UK activity in 2021 over concerns of a lack of consumer protection.
Binance resumed trading in the UK shortly after, via a partnership with the fintech company Paysafe, a move which did little to ease the concerns of the FCA.
“Our concerns about Binance remain. We received a notification of this business partnership but have limited powers to object to arrangements of this kind,” said a spokesperson for FCA at the time.