Following the FCA ban on its UK partner, Binance will temporarily stop onboarding new customers

Binance is temporarily closing its doors to new customers in the UK. This follows a ban on the exchange's operating partner by the Financial Conduct Authority (FCA) in the UK.

According to the announcement of the exchange on October 16, 2023, crypto traders and investors who are not registered with the trading platform will not be able to do so in the United Kingdom in the future.

However, existing UK registered users can access the available services if they first complete the “Investor Disclosure and Eligibility Test”.

Meanwhile, the exchange said it is working with the FCA to ensure traders are not affected by these developments.

Insights into the collapse of Binance and the UK's strict promotion system

The FCA's promotion system has been extended to accommodate digital assets service providers, regardless of their scope of work.

All platforms must now integrate clear risk warnings into services offered to UK traders and meet communication standards before being approved by the FCA.

Penalties for ignoring the new financial promotion rules include being off the regulator's public warning list, fines and increased jail time.

Huobi, KuCoin and 143 other exchanges have been added to the FCA's warning notice since October 8.

The UK's financial regulator first released data for the second quarter of financial promotions between April and June 2023.

According to this data, the FCA's stricter approach has prompted businesses to make significant adjustments or remove 1,507 promotions under supervision.

In its bid to gain FCA approval, Binance hired Rebuildingsociety.com, a peer-to-peer lending platform, on October 6 to comply with FCA rules regarding trading relationships for UK-based clients.

This includes all articles on the website and mobile app for ads.

However, the FCA has restricted Rebuildingsociety.com from approving links to crypto platforms. The ban ordered the withdrawal of all existing approvals, including Binance.

The suspension of Binance's UK entity represents greater regulatory control for the platform and its CEO, Chanpeng Zhao.

The exchange has been in a legal tussle with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for being an unregistered exchange.