The UK's Financial Conduct Authority (FCA) has taken measures to impose restrictions on Rebuildingsociety, a peer-to-peer lending platform that partners with the cryptocurrency exchange Binance. This action was taken to ensure compliance with the FCA's marketing regulations.
In a notice issued on October 10, the FCA pointed out that Rebuildingsociety lacked the authority to "approve any financial promotional content targeting qualifying crypto assets for communication by unauthorized persons." As a result, the FCA required the platform to withdraw any existing approvals. This notice raises questions about Binance's partnerships with UK entities that meet the FCA's marketing requirements, as these requirements came into effect on October 8.
The FCA also issued a warning to Rebuildingsociety, urging the platform to inform its customers, which presumably includes Binance, that it "does not allow any financial promotional content for approved qualifying crypto assets." It further requested the withdrawal of any advertising that falsely claimed to approve financial promotions. The FCA expects Rebuildingsociety to confirm in writing its compliance with these requirements. Binance had recently partnered with Rebuildingsociety to enable its UK users to access the exchange's products and services through localized domain names since Binance is not registered with the FCA.
This move by the FCA comes less than a week after Binance's announcement of its partnership with Rebuildingsociety, which was aimed at allowing the exchange to promote spot trading, non-fungible tokens, and other products and services to UK users. To comply with FCA regulations, Binance also revealed that it would no longer offer referral bonuses and gift cards to its users.
The FCA's new marketing regime, effective from October 8, obliges companies, including cryptocurrency firms, to ensure that their advertising is "clear, fair, and not misleading," or risk facing criminal charges. Due to the uncertainties surrounding these rules, some companies might seek approval by the January 2024 deadline, but it remains unclear whether Binance plans to extend this deadline. Several other companies, such as OKX and MoonPay, have already announced their intentions to comply with the FCA's regulations.
