Binance’s launch of fiat-to-crypto payments provider Bifinity on Monday, March 7, has met with immediate resistance from U.K’s top regulatory body – Financial Conduct Authority (FCA).
With Monday’s launch, Binance confirmed that its newly launched Bifinity service will advance a $36 million convertible loan to Eqonex. This gives Bifinity some specific contractual rights over Eqonex. The FCA explains that Eqonex is the parent company of Digivault, a crypto business officially registered by the FCA under the Money Laundering Regulations (MLRs).
The British regulator argues that with this arrangement between Bifinity and Eqonex, Binance is trying to bypass the regulatory scrutiny. Furthermore, the FCA notes that it only regulates Binance Markets Limited, a subsidiary of the Binance Group.
Expressing its concerns further, the FCA notes that no other entity in this Binance Group holds any official license to conduct any regulated activity in the U.K. It adds:
Due to requirements imposed by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the written consent of the FCA. This requirement was put in place because, in the FCA’s view, Binance Markets is not capable of being effectively supervised.
This is particularly concerning in the context of Binance Markets’ membership of the global Binance group, which offers complex and high-risk financial products posing a significant risk to consumers.
Thus, the FCA has threatened to cancel the registration of Binance Bifinity in case it fails to comply with the obligations under the Money Laundering Regulations.
About Binance’s Bifinity
Bifinity is Binance’s fiat-to-crypto payments service provider connecting businesses, merchants, and users from the blockchain and the crypto space. Using Bifinity’s intuitive APIs, merchants can make their businesses crypto-ready. Helen Hai, President of Bifinity said:
“As the crypto and the Web3 economy continue to grow, we see greater demand to build improved fiat-to-crypto on-ramps to bridge the gap between the traditional finance industry and the decentralized and centralized crypto economy”.
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