Obike Favour Obike Favour 16.02.2022

UK's FCA Expresses Concerns Over the Impact of Binance Partnership with Paysafe

The UK's Financial Conduct Authority (FCA) has expressed its concern over a deal that will see the leading cryptocurrency exchange, Binance, gain access to the country's primary payments network.

According to a Financial Times report on Wednesday, the FCA is wary about Binance restoring its links to the UK financial system just a few months after the regulator issued a warning about the crypto exchange. 

With the stern warnings issued by the FCA about Binance's operations in the UK, several top banks in the country had blocked their customers from sending funds to the crypto exchange.

However, Binance recently landed a deal with the multinational online payments company, Paysafe, to gain direct access to the Faster Payment Service, a major U.K. payments network. The partnership deal with Paysafe will allow Binance customers to make deposits to their accounts using this service.

The FCA noted that although it had been notified when the deal was made, it still has doubts about Binance but added that it had “limited powers to object to arrangements of this kind”.

“Paysafe is aware of our concerns and is under constant scrutiny in line with our approach to companies of size. We are unable to comment further,” the regulatory body added.

Speaking on the latest development, a spokesperson for Binance said, "We take our compliance obligations very seriously and work proactively and collaboratively with regulators."

Per the report, Paysafe's CEO, Philip McHugh said that the company will oversee the anti-money laundering (AML) and compliance checks for Binance customers, while the exchange will be responsible for collecting the information Paysafe needs to perform those checks.

McHugh pointed out that Binance has maintained its resolve to adhere to compliance obligations so far. He said, "We were impressed by how committed they were to change."

Binance's Regulatory Woes

The UK financial regulator had issued a warning earlier in June 2021, reminding investors that Binance was not authorized to offer its crypto services in the country. 

The leading crypto exchange had also been besieged by a series of regulatory hurdles, with market watchdogs from various jurisdictions issuing warnings and restricting its services. Binance had faced similar restrictions from Hong Kong, Japan, Singapore, and many other regulators.

Binance, however, has begun making plans to secure regulatory approval in the UK. In an interview with the Telegraph in December, the exchange's CEO Changpeng Zhao revealed that Binance intends to become a fully regulated crypto services provider within the next 12-18 months.