UK Regulator Wary Of Binance Deal With Payment Network Paysafe

The UK top financial watchdog has disclosed its reservations concerning the latest partnership between Binance and Paysafe, one of the largest payments networks in the country. The deal enables direct deposits to the crypto exchange from UK bank accounts and gives Binance access to a key payment service in the country.

FCA Concerned As Binance Gains Access To Payment Portal

According to a report published by the Financial Times on Wednesday (February 16, 2022), the world’s largest cryptocurrency exchange Binance recently inked a deal with Paysafe, a major payment portal in the UK.

Details from the partnership with Paysafe reveal new features for Binance users in the jurisdiction. The crypto exchange said investors now have the option to deposit Pounds Sterling to the platform directly from their bank accounts. Users can complete such transactions via a leading payment service in the UK called Faster Payment, per the report.

In addition to instructions for crypto investors regarding how to leverage the payment portal for simpler interbank settlement and deposits to its exchange, representatives from Binance said the deal signals its intentions to repair relations with regulatory agencies in the UK. 

Binance previously lost access to the Faster Payment network back in 2021 following a cease and desist order issued by the Financial Conduct Authority (FCA). The regulator reportedly published a consumer alert against the crypto platform and tagged the exchange as a risk to consumers.

Following the announcement of the partnership, the FCA has said it is wary that Binance has successfully regained access to the UK’s financial system. However, officials disclosed that the financial regulator received prior notification about the partnership and does not command sufficient authority to dissolve the arrangement.

Furthermore, the UK’s top watchdog has reportedly communicated its concerns to Paysafe. FCA officers emphasized that the payment portal falls under its purview and is subject to close supervision.

Chief Executive Officer of Paysafe, Philip McHugh, refrained from directly responding to the FCA’s comments. Instead, McHugh said the company maintains full control of anti-money laundering (AML) and regulatory compliance checks when dealing with Binance customers.

The CEO also added that the exchange remains responsible for collecting and providing the necessary information to run all required checks.

CZ’s Regulatory Battles

The latest comments from the FCA align with previous rhetoric regarding Binance operations in the UK. Back in June 2021, the country’s market supervisor ordered the cryptocurrency exchange to stop all regulated activities with immediate effect.

While the notice was addressed to Binance Markets Ltd, the company’s only regulated UK entity at the time, the FCA also issues a stern warning to investors about using any trading service offered by the platform. 

The popular exchange headed by crypto entrepreneur Changpeng Zhao has also found itself at the center of regulatory disputes in a plethora of jurisdictions. As previously reported by crypto.news, Japan’s Financial Services Agency (FSA) announced that Binance was not licensed to operate in the country. 

The FSA warned the exchange to stop operations or face legal actions. Japan’s top regulator issued a similar warning again in June 2021 after reports that Binance continued to operate without a license. 

In a similar incident back in February 2020, regulators in Malta announced that Binance never received official authorization to operate a cryptocurrency business in its jurisdictions