UK customers are no longer permitted by Barclay to transfer funds to the Binance crypto exchange after the announcement made by the Financial Conduct Authority last month. The FCA dictated that the digital asset exchange was no longer authorized for conducting any crypto business within the country’s borders. On Monday, the London-based bank notified clients that they were prohibited to use their debit and credit cards for making payments on Binance. The bank said that it would go into effect immediately and was aimed at protecting all clients’ funds. They also added that this action wouldn’t have any impact on the customers’ ability to withdraw their funds from Binance.
The bank disclosed that the decision was taken after the warning issued by the FCA to consumers. The decision by Barclay comes as lenders in the UK are grappling with the extent to which they should permit clients to move their funds to and from cryptocurrency exchanges. This is primarily due to concerns regarding a lack of regulatory oversight over the crypto sector as well as the compliance standards followed by exchanges, which tend to vary. Last month, the UK regulator had issued a formal consumer warning regarding the Binance exchange and had banned it from conducting any ‘regulated’ financial activities.
These included the arrangement of conventional investment deals. The FCA announced that Binance no longer had the authorization of conducting any crypto operations in the United Kingdom. There have been times when Binance has struggled in maintaining compliance due to its sprawling operations. These include trading in options, digital coins, stock tokens, and saving accounts. An executive working at a payment company that had helped in connecting the exchange to the broader financial market before it cut ties with it said that Binance made big claims about following the know-your-customer and anti-money laundering rules.
However, when it really came to throwing human resources for addressing the compliance issues, the exchange showed resistance. Binance hasn’t yet commented on this blockade by Barclay, but the exchange has previously denied statements about lack of compliance capacity and said that it addresses all legal obligations seriously. The group doesn’t have any formal headquarters and it uses a number of global affiliates for connecting to the global financial markets. As far as Europe is concerned, entities have entered into agreements with UK-based payment providers, such as Clear Junction and Checkout.com, which allow hard currencies to flow on and off its platform.
Last week, NatWest said that they had blocked payments to a few crypto-asset firms as they had seen fraud-related harm to their clients. Santander also stated that it was considering its stance on payments to unregulated crypto exchanges. A lot of attention by global regulators has been focused on controlling ‘on ramps and off ramps, which is basically where money is passed between the traditional financial system and cryptocurrencies, and this places banks at the center for protecting consumers from money laundering and fraud. With the FCA’s announcement regarding Binance, the situation has become more complex for banks.