A Binance-affiliated company has run afoul of the U.K.’s new cryptocurrency rules.
The Financial Conduct Authority (FCA) issued an alert Tuesday (Oct. 10) saying it was blocking the peer-to-peer platform rebuildingsociety.com from approving financial promotions for Binance and other crypto firms.
The ruling came two days after the FCA’s new rules for crypto marketing went into effect, and three days after the company announced its partnership with Binance.
The FCA said in its alert that Rebuildingsociety.com cannot approve crypto ads for firms and should “withdraw any existing approvals” for crypto promotions by 5 p.m. on Oct. 11.
The authority gave the company until Friday (Oct. 13) to tell the FCA that it has taken measures to comply with the regulations.
PYMNTS has contacted both Binance and rebuildingsociety.com for comment but has not yet gotten a reply.
The FCA said last week it would crack down on companies that violated its rule for crypto promotions, saying these advertisements must be “clear, fair and not misleading,” and that companies need to give customers a 24-hour cooling off period to rethink purchases.
Lucy Castledine, the FCA’s director of consumer investments, told Bloomberg News the authority plans to scrape around 100,000 websites per day in search of breaches and then forward their names to international regulators.
“There are a significant number of firms who we don’t think we’ll be able to meet the new requirements,” Castledine said, but declined to name the companies.
“There are a number of fairly large overseas crypto exchanges that are targeting the U.K. that have failed to engage with us.”
PYMNTS used the FCA crackdown as a recent example of the way the crypto ecosystem “has been racking up more high-profile losses than it has wins, at least recently,” in a recent report.
Still, although the sector might be facing an existential crisis when it comes to regulation within the U.S. and beyond, “It’s times like these — bear markets — when changes in crypto technology happen,” Chainalysis Chief Product Officer Pratima Arora told PYMNTS.
And blockchain — the technical architecture supporting tens of thousands of cryptocurrencies — is being embraced by mainstream and traditional financial players alike.
“The true intrinsic value of blockchain, which is around programmability of transactions, immutability of transactions, and the ability to do delivery versus payment and always-on types of payments, has yet to be unlocked,” Mastercard Chief Digital Officer Jorn Lambert said in an interview with PYMNTS in July.