The Financial Conduct Authority (FCA), UK’s main financial regulator, has expressed worry over the recent Binance deal with Paysafe, a retail payment processor.
The U.K. financial watchdog claimed the latest Binance arrangement gives it access to the huge retail payments network via Faster Payment Services, a vital function that the crypto exchange halted due to regulatory concerns. In June, the FCA ordered Binance to suspend all of its services. Banks such as Barclays have withdrew their backing for the exchange, causing financial services to be suspended.
Following its cooperation with Paysafe, Binance was able to reintroduce Sterling deposits to its customers and resumed Single Euro Payments Area transactions on January 26.
The exchange has become a source of concern for the financial watchdog, which has labeled it a “serious risk.” However, the financial regulator also stated that it has little influence in these kind of collaborations, according to the Financial Times.
Paysafe, according to the FCA, is aware of their concerns and is subject to close continuing monitoring, which is consistent with their policy for enterprises of its size. He also stated that they are unable to talk further.
The cryptocurrency exchange has claimed that it has been working with the FCA in the aftermath of the warnings to become a compliant exchange in the country. Binance’s regulatory problems in 2021 began in the United Kingdom, when regulators issued repeated compliance warnings to the cryptocurrency exchange, followed by an order to shut down operations.
Hong Kong, Thailand, the Cayman Islands, Japan, and other jurisdictions issued similar regulatory warnings. By the end of the year, the crypto exchange behemoth had mended its ties with a number of Asian countries.
Although the United Kingdom’s crypto regulatory frameworks have yet to be finalized, crypto trading is not prohibited. The lack of a clear framework, on the other hand, forces crypto firms to rely on regulator guidelines, which change on a regular basis. In the United Kingdom, the current regulatory debate is centered on decentralized finance lending and staking. Nonetheless, lawmakers in the country are divided; some want to turn the UK into a crypto hub, while others remain opposed.