FCA concerned about Binance’s backdoor re-entry into UK payment network

FCA concerned about Binance’s backdoor re-entry into UK payments network

The UK’s financial market watchdog has expressed concern over a recent move by beleaguered digital asset exchange Binance that gave it access to the UK payments network. The watchdog kicked Binance out of the country in June last year for flouting basic financial regulations, but the exchange partnered with a payments company and regained access to sterling payments.

Binance had a tough year in 2021, to put it mildly. After years of reckless disregard for financial laws, regulators around the world have cracked down on the stock market.

In the UK, Binance had it even worse. In June, the Financial Conduct Authority (FCA) issued a consumer warning revealing that the local branch of the exchange was operating illegally and was not authorized to offer regulated services.

While Binance attempted to sugarcoat the situation by issuing press releases claiming it was in talks with the regulator, financial service providers were quick to act, ending their relationship with the exchange. Barclays severed ties with the stock exchange and halted credit/debit card payments, and soon after, Europe’s biggest bank HSBC did the same. Binance suspended euro deposits through the Single Euro Payments Area (SEPA) soon after.

It has now found a backdoor in the UK payments industry, partnership with London-based payment group Paysafe. Starting January 26, the partnership allows Binance users in the UK to make deposits in British pounds through the faster payment service.

Like the Financial Times reports, this partnership and the reintegration of Binance into the UK payment network concerns the FCA. Despite acknowledging that it had been told about the partnership beforehand, the watchdog said its concerns remained. However, in these matters, he has limited powers of action and, as such, he will not oppose the company.

“Paysafe is aware of our concerns and is subject to close ongoing monitoring in line with our approach for businesses of its size. We cannot comment further,” the watchdog told the Financial Times.

Binance reiterated the same message it has been issuing for several months now, saying it is committed to compliance.

“We take our compliance obligations very seriously and work proactively and collaboratively with regulators,” he told the outlet.

This commitment to compliance has become rhetoric that Binance has championed, even when regulators around the world have proven it has taken its compliance obligations lightly. Just recently, a Reuters exposé revealed that the exchange continues to reiterate this message even as it continues to defy laws in Malta, Singapore and dozens of other jurisdictions.

Senior Binance officials have enforced this laxity on compliance for years, Reuters found. In a Telegram thread, compliance officer Samuel Lim told exchange staff that CEO and founder Changpeng Zhao “didn’t want KYC and wanted users to be able to trade within 10 minutes of signing up. “.

“Reduce KYC. Increase limits. BEST COMBO,” Lim reportedly said, conveying the message he received from the exchange’s superiors.

Reuters also revealed how Zhao rules Binance with an iron fist, instilling fear in all his employees, so much so that even senior executives revealed they were terrified to tell him when Binance broke the law. .

For its part, Paysafe said that before embarking on the latest partnership, it looked into Binance and was happy with the standards the exchange upholds.

“We take our regulatory obligations very seriously and adhere to the highest industry standards. We have performed extensive due diligence on Binance to ensure they also meet these high standards, as we do with all merchant partners,” the NYSE-listed company said. noted in a media statement.

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