UK financial watchdog sounds alarm over Binance deal
The Financial Conduct Authority (FCA) has raised the alarm over claims a new deal will allow Binance to provide UK regulated services.
Yesterday, Binance’s payment technology arm announced it had struck a deal with Eqonex, the parent company of a firm regulated by the UK financial watchdog. Under the agreement Bifinity will issue a $36m loan to gain partial control of Eqonex which in turn owns Digivault, a crypto asset custody platform registered under the FCA’s money laundering regime.
“The FCA did not have powers to assess the fitness and propriety of the new beneficial owners or the change in control before the transaction was completed,” the regulator revealed in a statement.
“In the FCA’s view, Binance Markets is not capable of being effectively supervised,” the watchdog continued, noting that Binance group “offers complex and high-risk financial products posing a significant risk to consumers.”
In June 2021, the FCA gave crypto exchange Binance a public dressing down and accused the firm of operating without permission. The watchdog fired a further shot at Binance when it revealed it was unable to effectively supervise the exchange because it failed to provide basic information about its structure and activities.
In a statement issued today, Binance announced a “strategic partnership” between Bifinity and Eqonex. The UK’s financial watchdog clarified that its concerns about Binance still stand after Eqonex said the partnership would “initially focus on leveraging Digitvault as an FCA regulated custodian.”
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