The Financial Conduct Authority (FCA) of the United Kingdom has imposed restrictions on the peer-to-peer lending platform Rebuildingsociety.com Ltd (Ref. No. 656344), which had recently formed a partnership with crypto exchange Binance for compliance with local marketing regulations. According to a notice dated Oct. 10, 2023, the FCA has disallowed Rebuildingsociety from “approving the content of any financial promotion for a Qualifying Cryptoasset for communication by an unauthorised person” and mandated the withdrawal of any existing approvals.
Impact on Binance Partnership
The regulatory action suggests a setback for Binance as it may have lost a crucial partner in complying with the FCA’s marketing regime, which came into effect on Oct. 8, 2023. Binance had allied with Rebuildingsociety to enable its UK users to access the exchange’s offerings through a localized domain, given that Binance is not registered with the FCA. This partnership, announced less than a week prior to the restrictions, was aimed at marketing spot trading, non-fungible tokens, and other products to UK users. However, with the recent FCA notice, Rebuildingsociety is required to inform its clients, including Binance, about the restrictions, withdraw any ads offering to approve financial promotions, and confirm compliance to the FCA in writing.
The FCA’s marketing regime initiated on Oct. 8, aims at ensuring that firms, including those in the crypto sector, deliver “clear, fair and not misleading” advertisements or face legal ramifications. While certain firms might attain approval for a January 2024 deadline amidst rule ambiguity, it remains uncertain if Binance intends to pursue this extension.
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