The Financial Conduct Authority (FCA), the UK’s prime financial watchdog has imposed boundaries on Rebuildingsociety, a peer-to-peer lending platform, restricting it from issuing crypto ads. This move, a part of the FCA’s marketing regulations for crypto firms that became effective on October 8, has sparked an air of uncertainty.
Rebuildingsociety notably entered into a collaboration with the renowned crypto exchange Binance to conform to the regulator’s new marketing regime. The recent development hinders the firm from approving any financial promotion related to qualifying crypto assets and entails them to withdraw any extant approvals. This suggests a hefty blow for Binance as its existing UK partner is no longer in sync with FCA’s marketing regulations.
The notice tells Rebuildingsociety to notify its clients about an inescapable reality – any attempts to green-light financial promotions are no longer valid. Even Binance will be required to confirm its compliance to the FCA.
Binance’s goal was to leverage Rebuildingsociety’s network to facilitate the visibility of its products and services through a localized domain for UK users. This was possible despite Binance not being directly registered with the FCA. An interesting point to note here is that the FCA’s restrictions emerged less than a week post Binance’s announcement of teaming up with Rebuildingsociety.
Under the FCA’s regime, Binance had hinted that it would discontinue the scheme of offering referral bonuses and gift cards. Its objective was to ensure the ads provided were transparent, just, and to prevent any misleading communication. Failing, to do so would potentially lead to criminally prosecuting companies.
Will Binance avail of the January 2024 deadline to comply with the regulations? Can the recent guidelines lead to more companies adhering to regulations similar to OKX and MoonPay, who have publicly announced their commitment to comply with FCA’s rules? These are questions of concern as we wade through the somewhat foggy stretch of financial waters in the crypto world. The point of contention here is the balancing act between regulating cryptocurrency exchanges vs enabling free-market innovation.