FCA ‘Concerned’ About Binance Accessing UK Payments Network

The United Kingdom’s Financial Conduct Authority (FCA) on Wednesday (Feb. 16) expressed concern about a deal that gives cryptocurrency exchange Binance access to U.K. payments network Paysafe a few months after it said the deal would trigger “significant risk” for consumers, Financial Times reported.

After its agreement with Paysafe, Binance said users can “deposit [sterling]… via Faster Payment Service,” referring to a U.K. payments network, according to the report.

The deal was initially seen as a way to restore the connection between Binance and the U.K. financial system after it lost access to the Faster Payments network when the FCA put out a consumer alert against the exchange, saying it had to “stop all regulated activities in the country.” Following the FCA sanction, Barclays, Santander and other large U.K.-based banks blocked customers from sending money to Binance.

The FCA told FT its “concerns about Binance remain” after the Paysafe deal, but it has “limited powers to object to arrangements of this kind.” Since Paysafe is listed in the U.S., the U.K. authority has less power over it, according to Finextra.

“Paysafe is aware of our concerns and is subject to close ongoing supervision consistent with our approach for firms of its size,” the FCA said. “We cannot comment further.”

Paysafe declined to comment on FCA’s statement, while Faster Payments did not respond to FT’s request for comment.

“We take our compliance obligations very seriously and work proactively and collaboratively with regulators,” said Binance.

Related: SEC Examines Links Between Binance’s Founder and Trading Firms

Earlier this week, the Securities and Exchange Commission said it’s looking into the relationship the U.S. arm of Binance has with trading firms Sigma Chain and Merit Peak, so-called “market makers” with connections to Binance founder Changpeng Zhao. Both trade crypto on Binance’s U.S. exchange.

The regulators are looking into the way the Binance.US disclosed its links to the firms to customers. Binance.US says on its site that “affiliated market makers may trade on the exchange,” but it doesn’t say which ones are already doing so.

The SEC is also looking into documents from 2019 tying Zhao to those firms. Former executives say Zhao controlled both firms as recently as last year.