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UK Crypto Shake-Up: Binance Pauses New Customer Onboarding Amid FCA Tussle

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In response to regulatory constraints imposed by the UK’s Financial Conduct Authority (FCA), Binance, the world’s largest cryptocurrency exchange, has temporarily ceased accepting new UK customers as of October 16th. The decision was made after its UK promotions approver, Rebuilding Society, was struck by an FCA restriction concerning new crypto promotion rules.

Existing Binance Users Unaffected

Existing Binance users can continue using the platform without interruption, provided they have successfully completed the “Investor Declaration” and “Appropriateness Test” following the new regulations. However, this period will not make new products or services available to UK users.

Under the revised regulations, which came forward on October 8th, firms registered with the FCA can self-approve their advertisements. Alternatively, they may seek the assistance of authorized entities to approve their promotional content.

Binance has stated that it is actively searching for a new FCA-authorized partner in the UK. While the exchange strives to restore its financial promotions, it acknowledges the necessity for temporary restrictions on its platform and mobile app for UK users.

Binance has emphasized its dedication to working closely with the­ FCA (Financial Conduct Authority) to ensure that these advancements do not have­ any negative impact on its users. The­ exchange will continue displaying risk warnings promine­ntly and encourage UK users to re­fer to its “info” section for guidance before getting involved in cryptocurre­ncy investments.

Binance Seeks New FCA-Authorized Partner

Just days prior to the FCA’s action, Binance­ announced its partne­rship with Rebuildingsociety.com. The purpose of this collaboration is to align with the new marketing re­gulations. These regulations stipulate­ that cryptocurrency companies must be re­gistered with the FCA in order to self-approve their promotions. However, unregistere­d crypto firms can still have their advertise­ments authorized by approved e­ntities.

Despite collaborating with Rebuildingsociety.com, Binance faced a setback when the FCA issue­d an alert forbidding the approval of crypto advertise­ments for companies and demanding the­ withdrawal of any existing approvals. In response, Re­buildingsociety.com has been given a specified deadline­ to inform the FCA in writing about its compliance with the re­quired criteria.

The FCA justified its action by stating that it can impose requirements on firms when necessary to protect consumers. This action underscores cryptocurrency exchanges’ regulatory challenges in the rapidly evolving crypto landscape.

Related Reading | Crypto Gems for 2024: The 5 Coins You Should Invest In 

Brazilian Committee Targets Binance: Serious Allegations Emerge – Report

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A Brazilian congressional committee has taken a significant step in what appears to be a growing international crackdown on cryptocurrency exchanges. The committee has recommended the indictment of four senior leaders of Binance, one of the world’s largest cryptocurrency exchanges. The individuals facing potential charges include Changpeng Zhao, Binance’s founder and CEO, known as CZ.

The committee’s actions follow an investigation into crypto-related activities in Brazil, particularly focusing on potential Ponzi schemes. While the committee can only provide recommendations, it’s the Brazilian police who will ultimately decide whether to pursue formal indictments.

The accusations against the exchange and its leaders are severe. These­ include allegations of fraudulent management, unauthorized trading of securitie­s, and operating as a financial institution without proper authorization. According to the committe­e’s report, Binance is under intense suspicion in Brazil, emphasizing the­ seriousness of the situation. 

Binance Strongly Denies Accusations

In re­sponse, the exchange has vehe­mently denied these claims and expressed its commitment to cooperating with the­ committee’s investigation. They strongly reject any efforts to damage their reputation or subject their users and employees to unverified accusations.

The Brazilian committe­e made several recommendations regarding the­ scrutiny of the exchange’s activities. They advise­d the Federal Public Prose­cutor’s Office to examine the­ tax compliance of both Binance’s local unit and Binance Capital Management. 

In addition, they called for an inve­stigation by the country’s securities re­gulator, CVM, into the sale of derivative­s by Binance despite receiving a stop order. 

These developme­nts occur against a backdrop of ongoing regulatory scrutiny in Brazil surrounding Binance’s operations, including a CVM probe­ related to derivative­s sales. Furthermore, the­ pending acquisition of Brazilian securities broke­rage Sim; paul Investimentos by the exchange­ is still awaiting regulatory approval.

The exchange’s situation in Brazil mirrors the increasing international scrutiny the cryptocurrency exchange faces. Regulators in various countries, including the UK, have turned their attention to its activities, signaling the challenges and regulatory hurdles faced by the crypto industry on a global scale.

Similarly, as per a separate report, the UK’s Financial Conduct Authority (FCA) imposed restrictions on Binance’s UK-approved partner, Rebuilding Society, concerning financial promotions compliance. 

The FCA’s intervention restricts Rebuilding Society from approving financial promotions for unauthorized crypto-asset service providers, marking another regulatory setback for the exchange’s operations in the UK.

Related Reading | FTX Hackers Resurge: $400 Million Heist Revisited Amid Trial Drama

Crypto Conundrum: UK Regulator Adds 143 Exchanges To Warning List

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The Financial Conduct Authority (FCA) in the United Kingdom has been actively monitoring the cryptocurrency landscape. On October 8th, it made a significant move by adding 143 crypto entities to its warning list of non-authorized firms that customers are advised to avoid. It includes major exchanges like Huobi-owned HTX and KuCoin.

The FCA’s decision comes after a period of scrutiny that began in 2020, during which they received 291 applications for registration and approved only 38 of them, a mere 13%. Currently, the FCA’s list of registered crypto asset providers comprises 42 entities, including well-known names like Bitstamp, Revolut, and Gemini.

One notable development is PayPal’s decision to halt crypto transactions for its U.K. customers until it can align with the FCA’s requirements. Similarly, Bybit, a Dubai-based cryptocurrency exchange, ceased all services in the U.K. in late September, citing regulatory changes.

The warning list does not offer detailed explanations but clearly states: “You should avoid dealing with this firm.” In the U.K., crypto firms must either be registered with the FCA or possess temporary status to operate legally.

The FCA take­s a strong stance on ensuring compliance. Jayson Probin, the­ crypto financial promotions lead at the FCA, warns that failure to follow re­gulations could lead to criminal charges. There­ are consequences, such as placing firms on the warning list and taking action against websites, social media accounts, and apps that violate these rule­s.

The FCA’s commitment to enforcing regulations is further highlighted by the release of data for the second quarter of 2023, showing that they’ve taken regulatory actions against 1,507 promotions and issued 400 warnings to unauthorized firms, 11% of which pertained to cloned companies.

Global Crypto Firms Adapt To UK Regulations

Despite­ the warnings and ample time provide­d for companies to adapt, some have encountered difficulties complying with the­ new rules. Nonetheless, major global crypto exchanges such as Binance­ and OKX actively strive to mee­t the FCA’s latest financial promotion regulations. 

To cate­r specifically to the U.K., Binance launched a dedicated domain, while OKX has stre­amlined its token offerings and promine­ntly incorporated risk warnings into its interface. 

Amidst this e­ver-evolving regulatory landscape­, companies like MoonPay face challenges in ensuring compliance while­ operating on a global scale. Matt Sullivan, deputy ge­neral counsel at MoonPay, acknowledge­s the difficulty of adapting to these rule­s without compromising their worldwide prese­nce.

Well, with the implementation of the FCA’s FinProm regime, it is evident that crypto companies are under heightened scrutiny and need to adjust quickly to maneuver through the evolving regulatory landscape in the United Kingdom.

Bybit’s Farewell To The UK As FCA Brings New Crypto Regulations

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Bybit, a prominent player in the world of cryptocurrency exchanges, has made a significant decision following extensive deliberations. In response to forthcoming marketing regulations set to be enforced by the UK Financial Conduct Authority [FCA] on October 8, the exchange has chosen to withdraw from the UK market. This strategic move reflects the evolving landscape of crypto regulation and its impact on market participants.

In a press release, Bybit officially announced that it will cease accepting new account opening applications from both United Kingdom residents and nationals as of October 1, 2023, at 8 a.m. UTC. This decision marks a proactive response to impending regulatory changes and sets the stage for a transition period for existing users.

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Bybit's Farewell To The UK As FCA Brings New Crypto Regulations 2

For Bybit’s current user base in the UK, a crucial deadline looms on the horizon. By October 8, 2023, at 8 a.m. UTC, existing users must initiate the closure of their accounts and withdraw their funds. Beyond this point, UK customers will find themselves unable to make new deposits, establish fresh contracts, or augment their existing positions across all products and services.

The platform emphasizes the importance of timely action for affected UK customers. Until January 8, 2024, at 8 a.m. UTC, users are strongly encouraged to proactively manage and wind down their positions. After this specified deadline, any remaining open positions will face liquidation, with the resultant funds made available for withdrawal.

Bybit’s withdrawal from the UK market follows the concerns of its co-founder and CEO, Ben Zhou, who foresaw the drastic move in light of these impending regulations. Zhou also highlighted that Bybit also bowed down from the French market due to regulatory pressures. As the top exec mentioned in a previous statement, he recognized the trend of increasing regulatory scrutiny, anticipating the need to retreat from multiple countries.

Bybit’s Exit Signal Shift In UK’s Crypto Regulation

The FCA, in its effort to introduce “tougher new rules,” has outlined a series of changes, including a mandatory 24-hour cooling-off period and the prohibition of incentives like ‘refer a friend’ bonuses. FCA’s announcement explicitly warns against any continued promotion of crypto assets to UK customers beyond the October deadline without compliance with the new regulations, which could potentially result in criminal charges, including the possibility of an unlimited fine and/or imprisonment for up to 2 years.

While the duration of Bybit’s suspension from the UK market remains uncertain, the exchange has indicated that this move allows the company to redirect its efforts and resources toward aligning with the regulatory framework established by UK authorities.

Bybit Weighs UK Exit Amidst Tightening Regulatory Grip: Report

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Bybit, one of the world’s leading crypto exchange operators, is contemplating a hasty departure from the United Kingdom in the wake of stringent new marketing regulations set to be enforced by the UK Financial Conduct Authority (FCA) on October 8. 

Ben Zhou, the CEO and co-founder of Bybit, voiced concerns that these impending rules might necessitate the company’s exit from the UK following its recent withdrawal from France due to regulatory pressures.

Zhou explained, acknowledging the challenges posed by evolving regulatory landscapes:

We do see regulation becoming more strict. Most likely, we’ll have to retreat in many countries. I think the UK—we’ll have to exit very soon. We recently exited France.

The FCA’s new regulations aim to enhance transparency and accuracy in marketing cryptocurrency products, including introducing a cooling-off period for first-time investors. 

These rules are expected to reshape the solicitation landscape and curtail the use of reverse solicitation loopholes that some exchanges had been utilizing to serve UK customers.

Zhou highlighted the FCA’s explicit outreach to major cryptocurrency players, including Bybit, OKX, and Binance, seeking their strategies for compliance with the upcoming regulations. The FCA’s definition of solicitation, which includes using the English language to target users, poses a significant challenge to the industry.

George Morris, a partner at Simmons & Simmons, emphasized the extensive scope of these regulations, suggesting that even websites accessible to UK customers might be construed as promotional from October 8, affecting a broader range of businesses beyond UK-based firms.

Bybit’s Likely Response To Regulatory Challenges

Despite the regulatory hurdles, Bybit remains a significant player in the cryptocurrency landscape, commanding around 23% of open interest in bitcoin futures, according to data from The Block Research.

CEO Ben Zhou also spoke about Bybit’s vision for the crypto market during Token2049, highlighting their commitment to simplifying decentralized finance (DeFi) for users. Bybit aims to educate and provide user-friendly products for beginners, making DeFi more accessible.

In the fiercely competitive crypto exchange market, Zhou expressed satisfaction with Bybit’s recent performance, emphasizing their desire for robust competition to drive innovation and offer superior products, particularly in the institutional space, with better yields than traditional financial offerings.

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Crypto Clarity Quest: FCA’s Asset Address

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Crypto’s upcoming FCA meeting aims to achieve enhanced regulatory clarity for the digital asset ecosystem, covering cryptocurrencies, blockchain development, and stablecoin payments.

Patrick McHenry, Chairman of the House Financial Services Committee (FSC), recently made an announcement regarding the markup of several legislations. Notably, three of these legislations are targeted at providing regulatory clarity for the digital asset ecosystem, with a focus on digital assets, blockchain development, and stablecoin payments.

Scheduled for July 26, the Committee on Financial Services will convene to discuss and markup various bills, including H.R. 4763, known as the Financial Innovation and Technology for the 21st Century Act; H.R. 4766, the Clarity for Payment Stablecoins Act of 2023; and H.R. 1747, the Blockchain Regulatory Certainty Act, among others.

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One particular focus among these bills is the regulation of stablecoin payments, championed by McHenry. The aim is to establish a clear regulatory framework for the issuance of stablecoins that are intended for use as a medium of payment.

On July 21, a memorandum highlighted the goals of H.R. 4763, which is intended to establish an appropriate market structure framework specifically tailored to the unique characteristics of digital assets. Additionally, H.R. 1747 aims to eliminate the necessity for blockchain developers to obtain licenses as long as they are not involved in dealing with cryptocurrencies.

The timing of these discussions coincided with the introduction of the Financial Innovation and Technology for the 21st Century Act, which garnered the support of U.S. Representative French Hill, Chairman of the Subcommittee on Digital Assets. Hill emphasized the importance of creating a functional regulatory framework to safeguard investors from financial fraud, illustrating that such measures would have prevented incidents like the theft of billions of customer funds by FTX.

DoJ Merges Teams: Crypto Crime Priority

In a bid to combat crypto-related crimes, the United States Department of Justice (DoJ) has taken significant steps by doubling the headcount of its crypto crime team. This decision involves the merging of two existing DoJ teams: the Computer Crime and Intellectual Property Section (CCIPS) and the National Cryptocurrency Enforcement Team (NCET). The consolidation of these teams results in a more robust structure with additional resources dedicated to addressing criminal activities related to cryptocurrencies.

This expansion signifies a notable increase in the number of criminal division attorneys who will now be available to handle cases involving criminal activities in the realm of cryptocurrencies. Any attorney from the CCIPS may potentially be assigned to work on cases brought forward by the NCET, effectively more than doubling the capacity to address crypto-related crimes.

What Lies Ahead For DOGE, SHIB, & PEPE As UK’s FCA Guidelines Raise Concerns?

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In light of the Financial Conduct Authority (FCA) of the United Kingdom’s recent focus on meme coins, there is growing concern regarding the future prospects of popular meme coins like Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe Coin (PEPE). These­ coins heavily rely on meme­s for communication.

In a bold move to regulate the rapidly expanding cryptocurrency market, the United Kingdom’s Financial Conduct Authority (FCA) issued a guideline aimed at curbing crypto memes’ noncompliance with its promotional regulations on July 18th. 

Traditionally, internet memes have served as a lighthearted means of expression and community engagement. However, the FCA’s latest directive indicates that these seemingly innocuous images may now be subject to strict regulatory scrutiny. 

The re­cently published guideline­ by the FCA highlights how memes are­ increasingly used in crypto communications, often without firms re­alizing the importance of complying with establishe­d guidelines.

In its official statement, the FCA reminds firms that any form of communication, including memes, can be considered a financial promotion and thus falls under the purview of Section 21 regulations. 

The FCA’s concern stems from the widespread circulation of memes and similar content on social media platforms, with users often unaware of their obligations to adhere to regulatory rules. This phenomenon is particularly prevalent in the crypto asset sector, where memes have become popular for promoting various digital currencies.

To illustrate the­ir point, the FCA has included an example­ in the guideline. This e­xample showcases a crypto-asset me­me that would fall within the financial promotion regime­. The inclusion of this example se­rves as a stark reminder to industry participants. It highlights that e­ven seemingly casual and humorous conte­nt can have serious implications under the­ regulatory framework.

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The impact of the FCA’s new guidelines on meme coins and their communities remains uncertain. Dogecoin, with its iconic Shiba Inu dog meme, has gained significant popularity and a devoted following, largely due to its meme-driven narrative. 

DOGE, SHIB, & PEPE Price Analysis

Despite these concerns in the market, these meme coins seem to be performing well at the moment. It has been observed that popular meme coins are displaying noteworthy growth.

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According to the latest data from Coinmarketcap, Dogecoin is currently being traded at $0.06952, experiencing a substantial increase of 6.38% in the weekly chart. Additionally, PEPE is being traded at $0.000001566, showing a 2.56% weekly gain, while SHIB is valued at $0.000007813, reflecting a rise of 3.59%.

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Withdrawal Woes: Binance Bows Out Of UK Market Amid Regulatory Battles

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Binance, one of the leading cryptocurrency exchanges, is facing further setbacks as it continues to withdraw from major markets due to regulatory challenges. 

The latest development involves the company’s United Kingdom-based subsidiary, Binance Markets Limited (BML), which has officially canceled its registration with the Financial Conduct Authority (FCA).

Binance’s Non-Operational UK Entity

The cancellation request was made by Binance Markets Limited, and the FCA confirmed that the withdrawal of registration was completed on May 30, 2023. 

As a result, none of the company entities now hold any operational approval in the UK, signaling an end to its ambitions in the country.

The troubles for the company in the UK began when the FCA flagged the local subsidiary in mid-2021, triggering similar warnings from regulators worldwide. The FCA initially imposed restrictions on Binance Markets Limited, preventing it from conducting regulated activities in the country.

According to Ilir Laro, Binance’s Sub-Regional Manager for Growth in the UK and Europe, the cancellation of BML’s registration will not have any operational impact since the subsidiary never conducted any business. 

He clarified that BML had remained dormant since its acquisition by the Binance Group in 2020 and never engaged in regulated business in the UK.

Earlier, the company had expressed its intention to focus on the UK market following regulatory challenges in the United States. However, the exchange is now shifting its attention to comply with the newly amended Financial Promotions Order, which will become mandatory for operating in the UK starting October 8, 2023.

In addition to its troubles in the UK, the company is also facing legal action in the United States. The exchange is dealing with civil lawsuits filed by both SEC and CFTC.

Furthermore, the company is scaling back its operations in Europe. It has already deregistered its regulated subsidiary in Cyprus and is exiting the Netherlands after failing to obtain a VASP license from Dutch regulators. The regulated French subsidiary of Binance is also reportedly under investigation.

However, as Binance continues to face regulatory challenges and legal proceedings, the future of the exchange’s global operations remains uncertain. It remains to be seen how the company will navigate these obstacles and regain its footing in the cryptocurrency market.

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Bitstamp UK Joins FCA Registered Firms, Reinforcing Commitment To Compliance

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Bitstamp, the renowned crypto platform, has accomplished yet another achievement by becoming an approved firm under the esteemed Financial Conduct Authority (FCA) in the UK.

The recognition confirms the exchange’s status as one of the safest and most compliant crypto exchanges in the worldwide market.

Bitstamp stated its pride in being recognized among a few selected crypto exchanges by the FCA in an official announcement. The company presently has 52 licenses and registrations worldwide that are impressively tallied. This emphasizes its loyalty to running with the highest standards possible.

The exchange’s attainment of FCA registration demonstrates its commitment to upholding financial standards and protecting customers, in line with traditional financial institutions.

Anti-money laundering (AML) and counter-terrorist financing (CTF) measures are included in these standards to ensure that users have the utmost security.

By complying with strict FCA requirements, Bitstamp’s registration demonstrates its commitment to regulatory compliance. A secure and compliant platform for accessing cryptocurrencies is provided to UK customers.

The UK-based company’s services cover a broad spectrum, providing for both institutional and retail customers. The duties require safeguarding cryptocurrency assets and conducting dealings with legal tender. Trading cryptocurrencies against other crypto assets are also included.

Bitstamp’s commitment to regulatory compliance has not gone unnoticed. The company recently achieved the top spot in CCData’s (formerly CryptoCompare) Exchange Benchmark report for the second consecutive time. 

With an AA rating, Bitstamp was the only platform to receive the highest rating in the report’s latest and previous four editions.

Bitstamp’s Crypto Lending Performance Report

In addition to its regulatory milestones, the exchange has also released its first Crypto Lending Performance Report for May 2023. The report highlights the strong performance of Bitstamp Earn Lending, which primarily consists of Bitcoin (65%), Ethereum (11%), and Ripple (11%).

Notably, all borrowers have made timely repayments of interest and principal, maintaining a consistent level of creditworthiness. The absence of non-performing loans has enabled the exchange to provide users with a steady Annual Percentage Yield (APY).

Nevertheless, the crypto industry matures, and regulatory compliance becomes increasingly vital. The exchange’s registrations and CCData’s recognition reaffirm the company’s commitment to compliance, security, and transparency.

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FCA grants approval to a crypto firm under AML-CTF norms; Others continue to wait

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UK’s Financial Conduct Authority’s or FCA has accepted registration requests by digital asset market maker Wintermute under anti-money laundering and counter-terrorist financing or AML-CTF regime for crypto firms. According to the Wintermute website, the platform’s cumulative trading volume stood at $1.72 trillion since January 2020.

In addition to that, data from the firm’s site revealed that it trades more than $5B on a daily basis across dozens of different trading platforms and facilitates more than 5,000 trading pairs.

The latest developments assumed significance because it took more than a year and a half of in and out with the FCA to gain approval of the application that encompasses the firm’s over-the-counter [OTC] spot business. Speaking on the news, the company’s chief operating officer Marina Gurevich said

“Wintermute has always held itself to the highest compliance standards and has built rigorous KYC-AML processes.” Reading along similar lines the official tweet stated, “We view this registration as an important step in our continued dialogue with the regulators globally.”

FCA’s stricter rules have led many crypto firms to shift

About 100 crypto firms are still waiting for the green signal to begin their operation in the U.K. As March 31 deadline approaches, it seems FCA‘s delaying tactics might force many crypto service providers to move their business offshore in order to avoid stricter, new anti-money laundering regulations.

A total of 96 crypto firms’ fate hangs in balance, with just six having won full approval, as per sources. More than half of the 153 firms that applied have either been rejected or decided to withdraw to avoid an outright denial that could dent their ability to apply for AML approval in other nations.

Of that, 27 are firms still operating under the temporary approval permissions that are slated to expire next month, and 69 have their applications pending.

The March deadline to win a place on the AML register has the potential to backfire, a representative of Vienna-based cryptocurrency exchange BitPanda told in an interview. Last June, crypto loan provider Celsius said in a blog post that “increased regulatory uncertainty” forced it to shift from the U.K. to the U.S. And had stopped accepting new U.K. clients.