The Financial Conduct Authority has again raised concerns about Binance after the crypto group completed a deal that effectively gives it control of a UK regulated company.
Binance, through a recently formed unit called Bifinity, has agreed to advance a $36 million convertible loan to crypto firm Eqonex. The deal gives Bifinity the right to appoint the Eqonex CEO, CFO and CLO as well as nominate two seats on the firm's board.
The "partnership will initially focus on leveraging Digivault [owned by Eqonex] as an FCA regulated custodian".
The FCA has put out a statement saying that it did not have the powers to assess the fitness and propriety of the new Digivault beneficial owners, or the change in control, before the transaction was completed.
But the regulator again stressed its misgivings about Binance.
Currently, only one part of the Binance group - Binance Markets Limited - is regulated by the FCA. The watchdog has put strict requirements in place that mean it has to give written consent before Binance Markets can carry out any regulated activity.
"This requirement was put in place because, in the FCA’s view, Binance Markets is not capable of being effectively supervised," says the statement.
The FCA says that it can suspend or cancel a crypto business's registration if it does not consider the beneficial owner fit and proper or if the company has not complied with money laundering rules.
Last month, the FCA expressed similar concern about a deal to give Binance access to the UK's Faster Payment Service through an agreement with US-listed Paysafe.