Market News

BY  Emily Nicolle, Bloomberg News

The Binance logo on a laptop arranged in the Brooklyn borough of New York, US, on Wednesday, June 7, 2023. The list of digital tokens deemed as unregistered securities by the Securities and Exchange Commission now spans over $120 billion of crypto after the US agencys lawsuits against Binance Holdings Ltd. and Coinbase Global Inc. , Bloomberg

(Bloomberg) -- Binance Holdings Ltd.’s efforts to re-enter the UK market are being frustrated by reluctance among prospective local partners to work with the world’s biggest cryptocurrency exchange amid regulatory opposition.

At least three UK firms with regulatory permission to approve communications between crypto platforms and their clients have rebuffed requests from Binance in recent months, people with knowledge of the matter said, requesting anonymity to discuss private deliberations.

The rejections came after the UK’s Financial Conduct Authority expressed concern to several of the authorized businesses that inquired about working with Binance, two of the people said.

The FCA’s stance illustrates the mammoth task facing Binance Chief Executive Officer Richard Teng, who was charged with rebuilding trust among regulators worldwide when he took the helm in November. Teng ascended to the top job after founder Changpeng ‘CZ’ Zhao was forced to resign as part of an agreement with US authorities in which Binance agreed to pay $4.3 billion in penalties.

Under expanded Section 21 rules adopted last year, most digital-asset service providers are required to work with such third-party companies to offer services in the country. Binance in October suspended access for new UK customers after the FCA terminated its agreement with then-partner Rebuildingsociety.com.

Read more: Binance to Halt New UK Customers From Using Crypto Exchange 

Binance denied that its attempts had faced opposition. “It is not accurate to say that we have been rebuffed by section 21 approvers in the UK,” the crypto exchange said in an emailed statement. 

“We continue to have productive conversations with potential approvers and are confident that we will be able to provide a positive update soon,” Binance said. A spokesperson for the FCA declined to comment.  

Binance’s US deal followed a years-long investigation that saw it plead guilty to violating sanctions and anti-money laundering laws, including allowing terrorist groups like Hamas to trade on its platform. Zhao is currently residing in the US while awaiting sentencing, having been denied permission to travel back to his Dubai home. 

The FCA previously warned consumers against using Binance’s services in 2021, adding that the company was “not capable” of being effectively regulated due to its murky global structure.