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City Watchdog worried over Binance’s deal to have access to UK payments network

The cryptocurrency platform Binance making a deal that grants the platform access to the UK payments network has baffled the City watchdog, with the deal coming just months after the latter ordered Binance to stop all UK regulated activity last June due to the concerns over weak consumer protections.

The FCA (Financial Conduct Authority) said that,

it had limited powers to duly object to the arrangement with Paysafe, which is a London based payments provider, despite all its concerns about Binance offering high risk and complex investments to its consumers. The FCA also previously ordered Binance to stop all regulated activities in Britain due to the pouring worries about weak consumer protection, and the wider allegations of crypto industry’s potential role in fraud and money laundering. In lieu of this, some of the high street banks like Santander and Barclays, also barred their customers from sending money to the exchange.

This deal, however, opens up the potential for Binance users to deposit sterling through the Faster Payments Service via Paysafe, which the network for sending money between bank accounts that are operated by Pay.UK, which is the owner of this system.

Speaking on this matter, one of the spokespersons at FCA said,

“Our concerns about Binance remain. We received a notification of this business partnership but have limited powers to object to arrangements of this kind.” Adding to his words, he said that Paysafe is “aware of our concerns” regarding Binance, and that the payments provider is “subject to close ongoing supervision consistent with our approach for firms of its size.” This concern was first reported by the Financial Times.

Responding to it, Paysafe said that is a reputable payment with deep regulatory experience and knowledge. “We take our regulatory obligations extremely seriously and comply with the highest industry standards,” a spokesperson commented. “We always adopt a fully transparent approach when dealing with regulators.”

Binance has also issued notices in December to its UK customers,

asking them to provide additional information in order to continue having access to high- risk derivatives on this platform. As opposed to this Paysafe has said that it will maintain complete control of anti- money laundering and compliance checks based on the information it will receive about the customers via the exchange.

The warning issued by FCA is among the first in a series of allegation from around the world for Binance, one of world’s largest cryptocurrency exchanges. Regulators in Hong Kong and Japan ordered similar restrictions on Binance on trade in their financial systems.

Binance relies on a network of affiliated organizations

that have links with financial groups in different countries and therefore, has no fixed headquarters. The platform replied by saying that it takes its compliance obligations “very seriously” and that the firm works collaboratively with regulators. Another spokesperson added, “We have worked hard to build a robust compliance program that incorporates anti- money laundering principles and tools used by the top financial institutions.”

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