Santander has joined Barclays as the second UK bank to prevent customers from sending payments to Binance, the world’s largest cryptocurrency exchange. The block comes after the Financial Conduct Authority’s (FCA) recent warning on international cryptocurrency fraud.
Though Santander customers can no longer send money to Binance, they are still permitted to withdraw cash from the exchange until further notice.
Are Binance allowed to trade in the UK?
The announcement of the block comes from Santander’s UK help team, who replied to a tweet from a concerned customer who was already using Binance’s services.
“In recent months we have seen a large increase in UK customers becoming the victims of cryptocurrency fraud. Keeping our customers safe is a top priority, so we have decided to prevent payments to Binance following the FCA’s warning to consumers.”
The FCA have said that Binance are not currently permitted to undertake any regulated activity in the UK, since they do not meet the strict FCA requirements on money laundering. However, Binance still offer UK customers a range of products via their website.
A firm that wishes to advertise or sell cryptoassets in the UK must be registered with the FCA, though most currently are not. This is due to the FCA regulations on money laundering, terrorist financing, and transferring funds.
By investing in unregistered cryptoassets, you will not have access to certain financial protections should things go wrong. There are currently only five registered cryptoasset companies in the UK that can be found on the FCA website.
Binance and international scrutiny
Binance had already been banned in the US on regulatory grounds, prompting the creation of Binance.US. This separate exchange was designed to comply with US laws, though still found itself banned in seven US states.
Binance has also received regulatory scrutiny in Japan, Canada, and the Cayman Islands, in which it is based. It has even received a criminal complaint in Thailand.
Binance have said that the move is disappointing, and that they take the security of their users’ money “very seriously”. CEO Changpeng Zhao said in a blog post last week, “we have always held Binance to the highest standard to prioritise our users’ best interests – a goal that we share with regulators around the world.”
He also comments on how local regulations are a recent invention for cryptocurrency firms, and that it takes time to ensure that a company can comply with them all. “We are committed to being compliant with appropriate local rules wherever we operate.”
A number of UK banks have moved to revaluate their stance on cryptocurrency firms, including NatWest, who have blocked payments to a small number of firms that had seen high levels of fraud.
Binance have since stopped customers from withdrawing GBP from their accounts, though the suspension is thought to be temporary.