Binance's U.K. partner is not allowed to approve crypto ads, the local financial watchdog said on Tuesday, potentially derailing the exchange's attempts to comply with a new marketing regime.
Last week, Binance announced it was partnering with Rebuildingsociety.com just ahead of new crypto promotions rules coming into force over the weekend. The regime requires crypto firms to be registered with the Financial Conduct Authority (FCA) to be able to approve their own promos and ads – but allows crypto firms that are not registered to have their ads approved by authorized firms.
Binance, which is not registered with the FCA, said it was complying with the new regime by partnering with Rebuildingsociety.com to have it approve communications for the crypto firm.
But on Tuesday, the FCA posted an alert saying Rebuildingsociety.com cannot approve crypto ads for firms and should "withdraw any existing approvals for crypto promotions." The firm has till Friday to tell the FCA that it has completed the necessary steps in writing.
"The FCA can impose requirements on a firm in circumstances where it concludes that it is necessary to do so to advance one or more of the FCA's operational objectives, which includes securing an appropriate degree of consumer protection," it said in a post.
While Binance declined to comment on the restrictions placed on its U.K. partner, a spokesperson for the exchange told CoinDesk that it had shared its partnership agreement with the FCA on Oct. 2, "almost a full week before the requirements of the updated Financial Promotions Regime came into effect."
While the FCA declined to comment further on the matter, it said in a late Tuesday post that if "unregistered crypto asset firms’ promotions" are no longer approved by an authorized firm, "they must cease promoting crypto assets to U.K. consumers until such time as they can find an authorized firm to approve their financial promotions."
The news was first reported by The Block. CoinDesk reached out to Rebuildingdociety.com.
Sandali Handagama contributed reporting.
UPDATE (Oct. 11, 08:27 UTC): Adds FCA comments from its website to paragraphs 5 and 7.
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