The United Kingdom Financial Conduct Authority, or FCA, has issued a warning to Binance Markets in response to payments company Binance Bifinity and investment company Eqonex entering into a strategic partnership.
In a statement on Monday, the FCA confirmed that Binance Markets Limited is not allowed to conduct certain regulated crypto-related transactions in the UK without prior consent due to previous concerns that the company could not be “effectively supervised”, stating, that some of its products pose a “significant risk” to investors. The financial watchdog has hinted that Bifinity’s recent announcement of a partnership with Eqonex could raise concerns for UK regulators.
According to the FCA, the partnership between Bifinity and Eqonex has effectively meant that, under United Kingdom anti-money laundering legislation, certain individuals and entities that are part of the Binance group can now be considered the “beneficial owners” of Digivault, Diginex’s UK subsidiary, and the decision for Eqonex storage. The financial watchdog stated that it “did not have the authority to assess the suitability and integrity” of the Binance Group entities prior to the partnership, but had previously warned the public about its concerns about the cryptocurrency firm.
As part of its strategic partnership with Eqonex, Bifinity has agreed to provide a $36 million convertible loan aimed at expanding the companies’ products, including Digivault. According to the FCA, the loan grants Bifinity “specific contractual rights” with respect to Eqonex, which likely implies that the agreement could allow Binance Group’s company – in this case Bifinity – to conduct regulated crypto activities in the UK through Eqonex’s link to Digivault, which is contrary to the regulator’s notice. dated June 2021 on the termination of activities.
“The FCA may take steps to suspend or cancel the registration of a crypto asset business if it is not satisfied that the firm or its beneficial owner is suitable and proper,” the regulator said. “The FCA also has the power to suspend or cancel the registration of a firm’s crypto assets for a number of reasons, including if the firm has failed to comply with obligations under the Anti-Money Laundering Regulations.”
We are aware of the recent announcements made by Eqonex Limited and Binance Group confirming that an entity called Bifinity will provide EQONEX with a $36 million convertible loan. https://t.co/EV7keSHRpa — Financial Conduct Authority (@TheFCA) March 7 2022
Cryptocurrency exchange Binance said in June 2021 that the FCA notice would “have no direct impact” on its services, stating that Binance Markets is a “separate legal entity.” Binance CEO Changpeng Zhao later announced in December that the exchange plans to apply for an FCA license and hopes to be operational in the UK within 18 months.
Related: Binance Paysafe Deal Worries UK Financial Supervisors
In order to become a registered cryptocurrency firm in the United Kingdom, companies must operate in accordance with the country’s anti-money laundering and counter-terrorist financing regulations. it was reported that, as of February, 32 companies had received FCA approval as registered cryptocurrency asset service providers out of about 200 that had applied.
The United Kingdom Financial Conduct Authority, or FCA, has issued a warning to Binance Markets in response to payments company Binance Bifinity and investment company Eqonex entering into a strategic partnership.
In a statement on Monday, the FCA confirmed that Binance Markets Limited is not allowed to conduct certain regulated crypto-related transactions in the UK without prior consent due to previous concerns that the company could not be “effectively supervised”, stating, that some of its products pose a “significant risk” to investors. The financial watchdog has hinted that Bifinity’s recent announcement of a partnership with Eqonex could raise concerns for UK regulators.
According to the FCA, the partnership between Bifinity and Eqonex has effectively meant that, under United Kingdom anti-money laundering legislation, certain individuals and entities that are part of the Binance group can now be considered the “beneficial owners” of Digivault, Diginex’s UK subsidiary, and the decision for Eqonex storage. The financial watchdog stated that it “did not have the authority to assess the suitability and integrity” of the Binance Group entities prior to the partnership, but had previously warned the public about its concerns about the cryptocurrency firm.
As part of its strategic partnership with Eqonex, Bifinity has agreed to provide a $36 million convertible loan aimed at expanding the companies’ products, including Digivault. According to the FCA, the loan grants Bifinity “specific contractual rights” with respect to Eqonex, which likely implies that the agreement could allow Binance Group’s company – in this case Bifinity – to conduct regulated crypto activities in the UK through Eqonex’s link to Digivault, which is contrary to the regulator’s notice. dated June 2021 on the termination of activities.
“The FCA may take steps to suspend or cancel the registration of a crypto asset business if it is not satisfied that the firm or its beneficial owner is suitable and proper,” the regulator said. “The FCA also has the power to suspend or cancel the registration of a firm’s crypto assets for a number of reasons, including if the firm has failed to comply with obligations under the Anti-Money Laundering Regulations.”
We are aware of the recent announcements made by Eqonex Limited and Binance Group confirming that an entity called Bifinity will provide EQONEX with a $36 million convertible loan. https://t.co/EV7keSHRpa — Financial Conduct Authority (@TheFCA) March 7 2022
Cryptocurrency exchange Binance said in June 2021 that the FCA notice would “have no direct impact” on its services, stating that Binance Markets is a “separate legal entity.” Binance CEO Changpeng Zhao later announced in December that the exchange plans to apply for an FCA license and hopes to be operational in the UK within 18 months.
Related: Binance Paysafe Deal Worries UK Financial Supervisors
In order to become a registered cryptocurrency firm in the United Kingdom, companies must operate in accordance with the country’s anti-money laundering and counter-terrorist financing regulations. it was reported that, as of February, 32 companies had received FCA approval as registered cryptocurrency asset service providers out of about 200 that had applied.
