Binance access to UK payments network worries City watchdog

The City watchdog has raised concerns about a deal to give the cryptocurrency platform Binance access to the UK payments network just months after it ordered the company to stop all regulated activities in Britain.

The Financial Conduct Authority said it had limited powers to object to the arrangement with Paysafe, a London-based payments provider, despite its concerns about Binance offering complex and high-risk investments to consumers.

However, the deal opens up the potential for Binance users to deposit sterling via Paysafe through the Faster Payments Service, the network for sending money between bank accounts operated by Pay.UK, which owns the system.

Binance issued notices to UK customers in December asking them to provide additional information in order to continue to access high-risk derivatives on the platform.

Paysafe will maintain full control of anti-money-laundering and compliance checks based on the information it receives about customers via the exchange.

Binance has no fixed headquarters, instead relying on a network of affiliated organisations that link with financial groups in different countries.

Its affiliate in Britain, Binance Markets Ltd, was accused by the FCA of failing to respond to questions about the group in August 2021, making it near impossible to manage. The regulator also issued a consumer warning against Binance Holdings Ltd, which is registered in the Cayman Islands.