FCA expresses concerns over Binance subsidiary’s deal with EQONEX

Binance’s fiat- and digital-payments provider, Bifinity, entered into a strategic partnership with EQONEX, the digital assets manager. FCA warned of the possibility of cancelling EQONEX’s registration.

Founded in 2020 in Singapore, EQONEX secured a listing on Nasdaq. The firm offers cryptocurrency trading, custody and asset management services. Its group includes the eponymous crypto exchange and a registered FCA custodian Digivault.

The partners will focus on using Digivault, improving existing technologies, and expanding Bifinity’s geographic footprint through EQONEX’s licensing system. The parties will also explore opportunities to broaden the product range.

Bifinity will provide EQONEX with a convertible loan of $36 million for 18 months. The company will have the right to appoint a CEO, CFO and chief legal officer, as well as nominate two seats on the board of directors.

The FCA warned that after a change of control, they may suspend or cancel the business’s registration if the firm and its beneficial owner do not meet the requirements and standards.

“The FCA has the power to suspend or revoke a licence on a number of grounds, including when a firm has failed to meet anti-money-laundering rules,”, the notice said.

A similar warning was previously issued to the European crypto broker Bitpanda after an acquisition by the FCA-registered custodian Trustology.

Earlier, on 7 March, Binance launched the payments company Bifinity. In tandem with this, the bitcoin exchange announced partnerships with Safepal, Zilliqa, EQONEX and Checkout.com.

In December 2021, Binance CEO Changpeng Zhao stated plans for Binance to obtain registration in the United Kingdom.

Last year the FCA forbade Binance’s activities in the country. The company acknowledged that one of the causes of regulatory problems was the decentralized model of its business, and decided to abandon it.

Subscribe to ForkLog’s YouTube channel at YouTube!