Author: Syedur Rahman 9 July 2021
Syed Rahman of financial crime specialists Rahman Ravelli assesses why Barclays is not the only lender to have such concerns.
Barclays has stopped its UK customers from transferring funds to Binance.
The bank’s move comes just days after the Financial Conduct Authority (FCA) said that the digital asset exchange was not authorised to undertake crypto business within the UK.
Barclays has told customers that the ban on payments to Binance was coming into effect immediately in order “to help to keep your money safe”. Customers are still able to withdraw their funds from Binance
Barclays’ decision reflects the concerns expressed by some lenders about allowing their customers to move funds to and from crypto exchanges. These concerns have arisen due to the lack of regulatory oversight and the varying levels of compliance at such exchanges.
The FCA issued a formal consumer warning about Binance, banning it from regulated financial activities. Binance has attracted the attention of regulators in a number of countries. It has also been criticised by some in the financial sector for not devoting adequate resources to compliance, in order to prevent it being used for wrongdoing.
Binance has denied accusations that it is not treating its compliance obligations seriously. It said it was “disappointed that Barclays appears to have taken unilateral action” and added that it would “welcome a dialogue with Barclays to discuss any concerns that they have”.
The attention that has been focused on Binance recently has prompted a number of major UK banks to review payments being made by their retail customers. The banks have realised that there are not enough protections in place for customers who want to use cryptocurrency exchanges.
It is fair to say that the FCA still has some catching up to do when it comes to assessing regulation of the crypto sector. But the FCA’s action regarding Binance has at least highlighted the issues to banks, and some of them are responding.
Binance will now have to work with both regulators and financial institutions to prove it takes anti-money laundering controls seriously.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, civil recovery, cryptocurrency and high-stakes commercial disputes.