The UK’s financial watchdog, the Financial Conduct Authority (FCA), has implemented sweeping restrictions on peer-to-peer lender Rebuilding Society over compliance concerns. The move comes less than a day after the UK capital markets regulator rounded up over 140 “non-authorized” crypto firms in a warning list.
Rebuilding Society has been served with an intervention by the FCA, which bans it from making financial promotions at the behest of unauthorized crypto-asset service providers. “The firm must not approve the content of any financial promotion for a qualifying crypto asset for communication by an unauthorized person,” the FCA said.
Rebuilding Society falls under scanner of FCA for non-compliance
As per the intervention, the UK’s financial watchdog has ordered Rebuilding Society to call off any prior financial promotion approvals it has granted to unauthorized entities. The peer-to-peer lender has until 5 p.m. BST on Wednesday to comply.
Additionally, Rebuilding Society has been asked to reach out to clients using its third-party financial promotions service—and inform them that it has been barred from approving content from unauthorized persons or businesses. Furthermore, it has been ordered to pull back advertisements offering its service to greenlight financial promotions.
The FCA’s move comes days after Binance—the world’s largest crypto exchange—joined hands with Rebuilding Society to gain financial promotion compliance within the UK. Binance broke the news about its partnership with Rebuilding Society in a blog post last week, claiming it has “the FCA authorization and regulatory approval.”
The development comes against the backdrop of the UK’s new financial promotion rules on crypto assets. According to the new rules, which came into force on October 8, crypto businesses are barred from “making illegal financial promotions to U.K. customers.”
Those found guilty of violating the UK’s financial promotions rules could face up to 2 years imprisonment, an unlimited fine and enforcement action. However, Todayq News reported yesterday that a plethora of crypto firms are blatantly ignoring the UK’s new cryptocurrency marketing rules.
FCA intensifies its crackdown on crypto industry
The UK capital markets regulator has identified at least 143 such non-authorized crypto companies—including high-profile exchanges such as Huobi-owned HTX and KuCoin—and warned customers against doing business with them.
Amid a crackdown by the UK regulator, crypto companies are pulling out of the country. Last month, PayPal halted crypto buying services in the UK, while crypto exchange Bybit has announced its exit from the UK market.