Binance access to UK payments network worries City watchdog


The City watchdog has raised concerns about a deal to give the cryptocurrency platform Binance access to the UK payments network just months after it ordered the company to stop all regulated activities in Britain.

The Financial Conduct Authority said it had limited powers to object to the arrangement with Paysafe, a London-based payments provider, despite its concerns about Binance offering complex and high-risk investments to consumers.

The FCA had ordered Binance to stop all UK regulated activity last June over worries about weak consumer protections, amid a wider crackdown on the cryptocurrency industry’s potential role in fraud and money laundering.

Some of the UK’s largest high street banks, including Santander and Barclays, also took action, barring customers from sending money to the exchange.

However, the deal opens up the potential for Binance users to deposit sterling via Paysafe through the Faster Payments Service, the network for sending money between bank accounts operated by Pay.UK, which owns the system.

An FCA spokesperson said: “Our concerns about Binance remain. We received a notification of this business partnership but have limited powers to object to arrangements of this kind.”

The spokesperson added that Paysafe was “aware of our concerns” about Binance, and said the payments provider was “subject to close ongoing supervision consistent with our approach for firms of its size”. The regulator’s concern was first reported by the Financial Times.

Paysafe said it was a reputable payments partner with deep regulatory knowledge and experience. “We take our regulatory obligations extremely seriously and comply with the highest industry standards,” a spokesperson said. “We always adopt a fully transparent approach when dealing with regulators.”

Binance issued notices to UK customers in December asking them to provide additional information in order to continue to access high-risk derivatives on the platform.

Paysafe will maintain full control of anti-money-laundering and compliance checks based on the information it receives about customers via the exchange.

The FCA consumer warning was among the first in a series of global setbacks for Binance, which is one of the world’s largest cryptocurrency exchanges. Regulators in Japan and Hong Kong also ordered restrictions on trade in their financial systems.

Binance has no fixed headquarters, instead relying on a network of affiliated organisations that link with financial groups in different countries.

Its affiliate in Britain, Binance Markets Ltd, was accused by the FCA of failing to respond to questions about the group in August 2021, making it near impossible to manage. The regulator also issued a consumer warning against Binance Holdings Ltd, which is registered in the Cayman Islands.

Binance said it took its compliance obligations “very seriously” and that the firm worked collaboratively with regulators.

A spokesperson added: “We have worked hard to build a robust compliance programme that incorporates anti-money-laundering principles and tools used by top financial institutions.”

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Olivia Wilson
By Olivia Wilson


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