Key Binance UK Departure Throws Future Into Turmoil
Binance UK CEO Jonathan Farnell has reportedly stepped down after the UK’s Financial Conduct Authority (FCA) increased the compliance burden for crypto companies. The alleged move leaves Binance with its UK director, IIir Ergis Laro, as its sole representative.
Farnell previously worked at eToro and served as Binance UK director until Oct. 3. He was in charge of helping Binance comply with prevailing UK rules before the FCA’s recent additions.
Binance Needs New UK Partner After FCA Rejection
The FCA’s new rules address consumer concerns, requiring crypto firms to only advertise through authorized firms. Previous laws focused on preventing money laundering through exchanges.
Binance stopped serving UK customers a week after the FCA rejected its latest compliance proposal. The FCA also forbade Binance’s marketing partner from promoting crypto in the UK.
Since then, Binance has actively sought a new PR partner. OKX and Coinbase have enlisted the services of one of three FCA-authorized firms to help them secure approval.
The crypto industry criticized the FCA’s rejections of crypto applicants in 2022. The agency defended its approach, arguing that its rejections can help other companies draft successful submissions.
It either refused or rejected the majority of 195 applications for their non-compliance with anti-money laundering laws. In total, 29 companies withdrew their applications in 2022.
Regulators Wrap Tendrils Post-FTX
The collapse of FTX saw regulators pay more attention to how crypto companies handle customer funds. The UK Advertising Standards Authority was among the first globally to advocate for consumer protection against misleading crypto advertising.
Regulatory regimes in Hong Kong, South Korea, and, soon, Europe are heavily biased toward consumer protection. The compliance burden has seen some companies withdraw from certain regions, citing sky-high engineering costs that outweigh profit-making potential.
Binance withdrew from the Dutch and German markets after failing to meet regulators’ requirements. This, and the departures of several key executives following US civil and criminal inquests, have hurt the exchange’s business in the short term.
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Credit card payment processor Checkout.com canceled an agreement with Binance, removing a vital link between the exchange and its UK consumers. The company also lost fiat partners in Australia.