The world’s leading crypto exchange operator Binance has cleverly woven a global spiderweb of companies spanning regulatory regimes since its inception in 2017. Binance Group has so much money that it recently bought into the US financial magazine Forbes. The latest partnerships with Eqonex, Paysafe, or Checkout extend this powerful spider web. Binance founder Zhao Changpeng is the 18th richest person on the planet in the Bloomberg Billionaires Index with just under $64 billion. Regulators are concerned about the Binance Spiderweb.
Regulators feel helpless
Regulators are concerned about the dawning crypto era. In particular, The UK Financial Conduct Authority (FCA) is worried about the Binance Group. Firstly, the FCA does not want Binance and distrusts the world’s leading crypto exchange. Secondly, it clearly shows that national regulators are almost helpless in the face of crypto providers operating globally without borders and mainly outside the traditional FIAT system. This is especially true for Binance with its web of companies.
FCA worried about new Binance partnerships
Early this week, the UK (FCA) said that it is concerned about the announcement made by the Eqonex Group and Binance Group. According to the announcement, the Lithuanian entity Bifinity UAB will advance a US$36 million convertible loan to Nasdaq-listed crypto exchange Eqonex. Moreover, Bifinity has acquired some specific contractual rights over Eqonex Limited through this loan. Bifinity is the official fiat-to-crypto payments provider for the Binance Group, launched on 7 March 2022.
Eqonex Limited is the parent company of Digivault Limited, one of the cryptoasset businesses registered by the FCA under the Money Laundering Regulations (MLRs). As a result of the transaction mentioned above, the Binance Group may have become beneficial owners of Digivault.
The FCA said that it did not have powers to assess the fitness and propriety of the new beneficial owners or the change in control before the transaction was completed. However, the regulator previously published its concerns about Binance. The Binance Group includes Binance Markets Limited. The FCA regulates Binance Markets Limited with reference number 688849 for limited activities.
The FCA recently raised concerns about a partnership between Binance and FCA-regulated Paysafe Group. Binance has gained access to the FPS and SEPA payment systems with this partnership.
No effective supervison
Due to requirements imposed by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the written consent of the FCA. The FCA cannot effectively supervise Binance Markets as part of the global Binance Spiderweb.