The marketing guidelines set forth by the Financial Conduct Authority for cryptocurrency companies took effect on October 8th, compelling certain entities to establish partnerships with local businesses to ensure compliance. The United Kingdom’s Financial Conduct Authority (FCA) imposed restrictions on the peer-to-peer lending platform Rebuildingsociety, which had previously joined forces with cryptocurrency exchange Binance to align with the regulator’s marketing regulations.
In a notice issued on October 10th, the FCA declared that Rebuildingsociety lacked the authorization to “endorse the content of any financial promotions related to a Qualifying Cryptoasset for communication by an unlicensed entity.” As a result, they were instructed to retract any existing endorsements. This announcement raises questions about whether Binance can continue its partnership with a U.K.-based compliance partner under the FCA’s marketing standards, which officially came into effect on October 8th.
The regulatory body sternly advised Rebuildingsociety to inform all clients, including Binance, that it lacked the authority to approve any Financial Promotions for a Qualifying Cryptoasset. They were further instructed to withdraw any advertisements offering endorsement for financial promotions and confirm their compliance with the FCA in written form. Binance had aimed to leverage Rebuildingsociety to provide its services and products to U.K. users through a localized domain, as the exchange itself lacked registration with the FCA.
The FCA’s restrictions were implemented within a mere seven days of Binance’s announcement of its partnership with Rebuildingsociety, allowing the exchange to promote spot trading, nonfungible tokens, and various other products and services to U.K. users. Under the FCA’s regulations, Binance also announced the discontinuation of referral bonuses and gift cards.
This marketing framework, enacted on October 8th, was designed to compel companies, including those in the cryptocurrency sector, to create advertisements that are “clear, equitable, and devoid of misleading information,” or else face potential legal consequences. The FCA mentioned that some companies might secure approval for an extended deadline in January 2024 due to uncertainties surrounding the rules, although it remains uncertain whether Binance intends to pursue this extension. Other companies, such as OKX and MoonPay, have already disclosed their intentions to adhere to the FCA’s regulations.