Wednesday, October 5, 2022

Binance-Paysafe Transaction Deal Sparks Concerns from UK’s FCA

The Financial Conduct Authority (FCA), the UK’s top financial watchdog has expressed dissatisfaction over Paysafe’s recent partnership with Binance. Based on the news reported by The Telegraph, the partnership, which granted Binance complete access to the UK’s financial transaction network has become a source of concern to FCA.

The crypto exchange firm had previously been criticized by the FCA in the mid of last year. The exchange had been asked to quit all financial operations in Britain following the expressed insecurities on customers’ accounts and the perceived vast participation of crypto companies in hackers forgery and fund misappropriation.

The regulator explained that it has but only a limited capacity to protest or determine to what extent the Binance arrangement goes with Paysafe. Despite the concerns it has for the Paysafe and Binance deal, the FCA said it has no powers to overrule the arrangement.

The FCA fears that the risk involved in investing in the exchange platform is quite enormous and the complexity of such transaction should be addressed as a matter of urgency. 

The U.K. financial watchdog is skeptical that this partnership may give rise to Binance gaining more access to Paysafe making use of Faster Payment Services (FPS). Binance informed clients that Pound Sterlings can now be deposited on its payment portal via the FPS which is used by banks to promptly process fund transfers.

Faster Payment Services is a financial enterprise based in the United Kingdom which supports decreased transaction periods between clients’ accounts. It takes fewer seconds for transactions to be processed, a resource the FCA feels is not meant to be utilized by a banned entity.

No Intervention From FCA

Quite a number of leading banks in the United Kingdom like Boston’s Santander Bank and Barclays have reacted and have suspended Binance’s banking activities ranging from withdrawal to deposit of funds.

A member of staff who spoke for Paysafe assured that quality checks had been done on Binance to certify that the exchange firm complies with their high standard of operation. Binance spokesperson similarly said the firm complies strongly with its set obligations and commits to proactive and collaborative work with partners.

With all this due diligence as alleged intact, the FCA is still very concerned about Binance but reiterated that nothing can be done from its end. Meanwhile, Binance has recently invested $200 million in renowned media firm, Forbes, an indication that its global outlook and business growth remain robust irrespective of regional regulatory crackdowns.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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