Binance Holdings Ltd., the world’s largest cryptocurrency exchange, is grappling with challenges as it seeks to reestablish its presence in the United Kingdom.
Regulatory opposition and reluctance among prospective local partners have emerged as significant roadblocks in this endeavor.
Binance’s regulatory challenges emerge
Binance’s ambitious plans to reenter the UK market have been met with resistance from at least three UK firms that hold regulatory approval to oversee communications between crypto platforms and their clients.
These firms have reportedly rebuffed partnership requests from Binance in recent months, according to sources who wished to remain anonymous due to the sensitive nature of the discussions.
This wave of rejections followed the expression of regulatory concerns by the UK’s Financial Conduct Authority (FCA) to authorized businesses contemplating collaboration with Binance.
Binance CEO Richard Teng’s challenge
The regulatory obstacles facing Binance underline the formidable task at hand for the exchange’s Chief Executive Officer, Richard Teng. Teng took the helm in November, succeeding Binance’s founder, Changpeng ‘CZ’ Zhao, who was compelled to resign as part of an agreement with US authorities, which saw Binance agreeing to pay a hefty $4.3 billion in penalties.
In an effort to enhance regulatory oversight in the cryptocurrency sector, expanded Section 21 rules were introduced last year, mandating most digital-asset service providers to collaborate with third-party companies when offering their services in the UK.
Binance had been forced to suspend access for new UK customers in October after the FCA terminated its agreement with its previous partner, Rebuildingsociety.com.
However, Binance strongly refutes claims of encountering opposition in its attempts to reenter the UK market. The cryptocurrency exchange firmly stated in an email response, “It is not accurate to say that we have been rebuffed by section 21 approvers in the UK.” Binance maintains that it is actively engaged in productive discussions with potential approvers and is confident in providing a positive update in the near future.
Binance’s legal troubles and the US settlement
Binance’s legal woes in the United States have been a significant impediment to its global operations. A protracted investigation culminated in a settlement that saw Binance pleading guilty to violating sanctions and anti-money laundering laws.
Notably, the exchange was accused of enabling trading activities by terrorist groups, including Hamas, on its platform. Presently, Changpeng Zhao resides in the US while awaiting sentencing, as his request to return to his Dubai residence has been denied.
FCA’s previous warnings
The FCA had previously issued stern warnings to consumers against using Binance’s services in 2021. The regulator had expressed doubts about Binance’s ability to be effectively regulated due to its complex global structure
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