FCA raises concerns over deal to give Binance access to UK payment network Business

The city watchdog has raised concerns over Binance’s access to a UK payment network, after censoring the cryptocurrency trading firm last year.

Binance has informed its customers that they can now deposit British pounds via the faster payment service, used by banks to quickly process money transfers.

The move follows a deal with payments group Paysafe and comes after the Financial Conduct Authority (FCA) banned Binance from offering regulated services in Britain last summer, saying it had no not answered basic questions about its structure.

Following the Paysafe deal, the city watchdog said its “concerns about Binance remain,” but added there was little it could do to intervene. The Financial Times first reported the developments.

An FCA spokesperson said: “We have received notification of this business partnership but have limited powers to object to such arrangements.

“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 FCA’s order last summer that Binance not conduct any regulated business in Britain without prior consent came just two days after Japan’s financial regulator issued a consumer warning against the group. US and German regulators have also raised concerns.

Binance said at the time that the FCA notice did not affect its ability to let UK customers buy and sell cryptocurrencies, but the sudden suspension of its bank and card payment systems left holders with account few options to withdraw money.

He is now trying to improve his reputation in the UK. Changpeng Zhao, chief executive of Binance, known to colleagues and fans as “CZ,” told The Telegraph in December that relations with the regulator had improved since Binance was censored by the FCA l ‘last summer.

He said the company hopes to become a registered crypto asset company, which requires complying with money laundering and terrorist financing controls, within six to 18 months and plans to apply for an FCA license. .

Separately, Binance took a stake in the century-old business magazine Forbes last week following a $200m (£147m) investment.

A Binance spokesperson said, “We take our compliance obligations very seriously and work proactively and collaboratively with regulators.”

A Paysafe spokesperson said “we take our regulatory obligations very seriously and adhere to the highest standards in the industry. We have performed extensive due diligence on Binance to ensure they also adhere to these high standards, as we do with all merchant partners”.

It came as the global financial watchdog warned that the risks in the cryptocurrency market could “rise rapidly” as it becomes more intertwined with traditional finance.

The Financial Stability Board, which advises G20 countries on financial rules, said problems in the popular but volatile crypto sector could spread to wider markets as it urged countries to review their safeguards .

He said: “Crypto-asset markets are changing rapidly and could reach a point where they pose a threat to global financial stability due to their scale, structural vulnerabilities and growing interconnectedness with the mainstream financial system.”

The FSB said developing countries are more likely to be exposed given that many could adopt digital currencies. El Salvador recently made Bitcoin legal tender.

The warning echoes concerns raised by policymakers at the Bank of England. Deputy Governor Sir Jon Cunliffe said the value of crypto-assets could “theoretically or practically drop to zero”.

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This notice was published: 2022-02-16 14:45:45

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