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Binance UK in Hot Water As Co-Owner Accuses the Exchange of Misrepresenting Reports

Binance UK in Hot Water As Co-Owner Accuses the Exchange of Misrepresenting Reports
In Brief
  • U.K. shareholder of Binance said that the exchange had filed inaccurate information in its 2020 financial statements.
  • Binance said that it was currently unable to respond fully to the allegations.
  • The country’s Financial Conduct Authority (FCA) has expressed concern over Binance’s dealings on multiple occasions.

The co-owner of a U.K. subsidiary associated with Binance said that the exchange had filed inaccurate information in its 2020 financial statements.

The co-owner of a U.K. subsidiary of Binance alleged that the exchange was “grossly inaccurate” in its 2020 financial statements. The directors of Dimplx Limited, which was formed as a part of a joint venture with Binance, said that the report does not provide accurate representations of such things as turnover, assets, and liabilities.

The report was filed to the U.K. Companies House registrar. Specifically, it states that Binance Digital’s “turnover, assets, liabilities, including potential tax liabilities, net profits, nature of operations and/or related party transactions, were not accurately represented.”

Dimplx is a U.K. shareholder of the exchange. It says that the misfiling of information was deliberate and also called into question financial statements for the period ending on April 14, 2022. As such, the shareholder has difficulty in “determining the present fair value of Dimplx Limited’s shareholding in Binance Digital.”

Binance has responded to the allegations, telling a media house that it was unable to respond fully to allegations and that it understands “that the minority shareholders are disappointed that the joint venture did not bear fruit.”

Authorities scrutinizing Binance

The development marks yet another spot of trouble for Binance in the U.K., which has hit a few obstacles in its bid to expand into the region. The Financial Conduct Authority (FCA) has warned individuals about using the platform as it lacked a license. It also ordered Binance to stop regulated activities.

In February 2022, the FCA said it was concerned about the exchange’s deal with Paysafe, a payments provider. A month later, it raised more concerns about a partnership between Binance subsidiary Bifinity and financial services company EQONEX.

Binance CEO Changpeng Zhao has made it clear that the exchange wants to operate in the U.K. He said that Binance would relaunch in the U.K. within 6–12 months in December 2021.

Binance Changpeng Zhao (Cz)
Binance Uk In Hot Water As Co-Owner Accuses The Exchange Of Misrepresenting Reports 2

UK isn’t taking crypto regulations lightly

The U.K. is taking the crypto market very seriously, a market it sees as very speculative. The FCA has been blunt in its assessment of the market. It’s taken steps to curb the market, including warning social platforms to ban financial advertisements that lead to fraudulent products.

The U.K. FCA head also believes that crypto promotions need more oversight. He believes that the regulator needs more power to ensure investor protection. Binance co-founder He Yi thinks that the U.K. is the most stressful region when it comes to crypto regulation. She said that the exchange had made communication mistakes when applying for a license to operate.

This article was originally published on beincrypto.com

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