The FCA (Financial Conduct Authority) in the United Kingdom has threatened to withdraw the license of Bitfinity only a few days after the service was launched.
Global crypto exchange platform, Binance, launched a service provider called Bitfinity on the 7th of March. The purpose of Bitfinity is to allow users to carry out crypto payments using fiat currency.
FCA Accuses The Exchange Of Attempting To Avoid Scrutiny
Binance said on Monday that its newly established Bifinity service would provide a $36 million conversion loan to the Singapore-based company, Eqonex. This grants Bifinity some contract rights over the company. According to the British regulator, Eqonex is the conglomerate of Digivault, a cryptocurrency firm that the watchdog has properly registered under the MLRs (Money Laundering Regulations).
Binance, according to the UK regulator, is attempting to avoid regulatory scrutiny through this partnership between Eqonex and Bifinity. In addition, the FCA emphasizes that it solely oversees BML (Binance Markets Limited), a division of the Binance Company.
Further expressing its concerns, the Financial Conduct Authority adds that no other firm in the Binance Company has an authorized license to perform any authorized operation in the United Kingdom.
The watchdog stated that “Binance Markets Limited is presently not able to engage in any regulated activity without the prior authorization of the FCA according to its guidelines. This rule was implemented because the FCA believes Binance Markets is incapable of being adequately managed by the Binance company.”
“This is especially problematic given that Binance Market is affiliated with the larger Binance company, which offers specialized and risky financial products that pose a major danger to customers.” As a result, the FCA has threatened to terminate Bifinity’s registration if Binance refuses to adhere to its responsibilities stated in the Money Laundering Regulations.
In recent weeks, Binance has been doing some charity work by donating funds to the people of Ukraine amidst the ongoing war with Russia that has led to a drop in both the stock and cryptocurrency market.
The Bifinity Service
Bifinity is a fiat-to-crypto payment platform that links users, merchants, and businesses to blockchain and crypto enterprises. Merchants are able to make their company suitable for digital currency by utilizing the user-friendly APIs provided by Bitfinity. The president of the company, Helen Hai, stated:
“As the Web3 and cryptocurrency economies expand, we see an increase in demand for stronger fiat-to-cryptocurrency payment options to fill in the gap between the conventional banking industry and the centralized and decentralized cryptocurrency economies.”
The Financial Conduct Authority is a regulatory organization in Great Britain that functions on its own without interference from the government and is funded by fees levied on members of the financial services sector.