Barclays, a British multinational banking and financial services firm, has issued a memo to its clientele informing them regarding its new policies on debit/credit card payments to Binance, a cryptocurrency exchange that was recently identified as a non-compliant entity in a recent consumer warning by the Financial Conduct Authority (FCA) from any operation in the U.K.
In the recent consumer warning by the FCA, it was highlighted that Binance and all other brands operating under the Binance Group were not authorized to undertake its crypto businesses within the U.K. financial jurisdiction.
The notice from Barclays goes:
“As you've made a payment to Binance this year, we wanted to let you know that we're stopping payments made by credit/debit card to them until further notice. This is to help keep your money safe. For further info, please search FCA Binance online. We're sorry for any disruption this may cause you.”
The London-based bank then redirects its clients to FCA’s consumer warning after setting out the prohibition. According to Barclay’s the prohibition on card payments made to the crypto exchange “does not impact on the ability for customers to withdraw funds from Binance,” and as such was irreversible on those same terms.
“The decision has been taken following the FCA warning to consumers.” the bank adds.
Concerns over the lack of regulatory oversight on the crypto sector has led to the FCA consumer warning and by extension, to a wider concern among UK lenders who remain undecided on how to manage client requests for moving funds to and from crypto exchanges. The fact that compliance standards filed by crypto exchanges vastly differ has also exacerbated the matter of regulation.
The recent consumer warning by the FCA effectively provides a blanket ban on Binance, but it does not specify what other crypto entities are allowed on the outset, and has since still opened for applications from crypto startups vying to leverage their position in the UK’s growing crypto market.
In previous statements, Binance has denied that it lacked the capacity to submit compliance requirements asked for by regulators, although frameworks often differ from region to region. Binance has also said in previous press statements that it takes its “legal obligations very seriously”.
Other firms operating in Europe have taken to the strategy of partnering with UK-based payments providers including Checkout.com and Clear Junction, allowing them to operate through a series of affiliates in the global financial market.
According to data from the FCA, an estimated 2.3 million people in the UK actively hold cryptocurrencies, hence requiring the services of offshore platforms such as Binance to manage their funds. To date, only five crypto companies have been registered and provided with license to operate in the UK by the FCA.
Meanwhile, CryptoDaily has recently reported that other institutions such as NatWest have moved to block payments to a small number of cryptocurrency asset firms. NatWest, in particular, cited having seen “significant levels of fraud-related harm for [its] customers.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.