The UK’s Financial Conduct Authority (FCA) has thrown a wrench into Binance‘s efforts to adhere to new cryptocurrency marketing regulations by imposing restrictions on its recently engaged local partner. The FCA’s decision hinders Binance’s compliance with the updated crypto advertising rules that came into effect recently.
Binance’s Attempt to Comply
Binance had announced its partnership with Rebuildingsociety.com just ahead of the new crypto advertising regulations taking effect. These rules mandate that cryptocurrency companies must be registered with the FCA to approve their own promotional content. However, unregistered crypto firms are allowed to have their advertisements approved by authorized entities.
Binance, not being registered with the FCA, intended to comply with the new regime by partnering with Rebuildingsociety.com, allowing them to approve the crypto firm’s promotional materials. Nevertheless, the FCA issued a notice stating that Rebuildingsociety.com is not permitted to endorse crypto advertisements for any companies. The FCA has also instructed the firm to withdraw any previous approvals for crypto promotions and provide written confirmation of compliance by Friday.
The FCA justified its actions by stating its responsibility to impose requirements on firms when it believes it is necessary to safeguard consumers. Ensuring consumer protection is one of the FCA’s operational objectives, which it emphasized in its announcement.
Binance refrained from commenting on the restrictions placed on its UK partner. However, a spokesperson for the exchange revealed that they had shared the partnership agreement with the FCA on October 2, nearly a week before the updated Financial Promotions Regime took effect.
Consequences for Unregistered Crypto Firms
The FCA clarified that if unregistered crypto asset firms can no longer have their promotions approved by an authorized entity, they must cease promoting crypto assets to UK consumers until they can secure the services of an authorized firm to approve their financial promotions.
This development, initially reported by The Block, puts a significant hurdle in Binance’s path as it strives to navigate the evolving regulatory landscape of the UK cryptocurrency market. Rebuildingsociety.com’s response to the FCA’s directives remains awaited.