The United Kingdom’s Financial Conduct Authority (FCA) has imposed restrictions on the peer-to-peer lending platform Rebuilding Society. This platform was previously partnered with the cryptocurrency exchange Binance to ensure compliance with the FCA’s marketing regulations.
In a notice dated October 10th, the FCA stated that Rebuilding Society was not authorized to approve the content of any financial promotion for a qualifying cryptoasset for communication by an unauthorized person and required the withdrawal of any prior approvals. This development raises questions about Binance’s ability to maintain a U.K. partnership in compliance with the FCA’s marketing requirements, which came into effect on October 8th.
The FCA issued a warning to Rebuilding Society, instructing them to inform all clients, including presumably Binance, that they were not allowed to approve the content of any financial promotion for a qualifying crypto asset. They were also required to withdraw any advertisements offering to approve financial promotions and confirm their compliance with the FCA in writing.
Binance had intended to utilize Rebuilding Society to enable its U.K. users to access the exchange’s products and services via a localized domain, as Binance itself is not registered with the FCA. The FCA’s restrictions were announced less than a week after Binance unveiled its partnership with Rebuilding Society, allowing the exchange to promote spot trading, nonfungible tokens, and other offerings to U.K. users. As part of the FCA’s regulatory framework, Binance announced the discontinuation of referral bonuses and gift cards.
The objective of the marketing regulations, which became effective on October 8th, was to ensure that companies, including cryptocurrency firms, presented a clear, fair, and non-misleading advertisements, or they could face legal consequences. The FCA also mentioned the possibility of certain companies obtaining approval for an extension until January 2024 due to uncertainties surrounding the rules, though it remains uncertain whether Binance intends to pursue this extension. Other companies, such as OKX and MoonPay, have already announced their plans to comply with the FCA’s regulations.
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