UK’s FCA flags concerns over Bifinity’s partnership with Eqonex

Binance, a popular cryptocurrency exchange, may once again get in trouble with the UK’s financial regulators over its newly-launched subsidiary’s partnership with Eqonex, a cryptocurrency firm.

Bifinity, announced by Binance as its payments technology arm on March 7, has provided a convertible loan worth $36 million to Eqonex as per the terms of their strategic partnership. The loan has a maturity date of 18 months with an initial conversion price of $1.89 per share.

The partnership also allows Bifinity the right to appoint the Chief Executive Officer, Chief Financial Officer, and Chief Legal Officer of Eqonex, along with nominating two seats on Eqonex’s Board of Directors from Bifinity itself.

Meanwhile, the deal did not go right with the UK’s Financial Conduct Authority. The financial regulator reiterated that Binance Markets, a company regulated by the FCA, is not permitted to undertake any regulated activities without the written consent of the FCA. The statement elaborated:

“This requirement was put in place because, in the FCA’s view, Binance Markets is not capable of being effectively supervised. This is particularly concerning in the context of Binance Markets’ membership of the global Binance group, which offers complex and high-risk financial products posing a significant risk to consumers.”

However, the regulator pointed out that Binance may indirectly conduct unauthorized activities in the region through Digivault, an FCA-registered digital assets subsidiary of Eqonex. The FCA reiterated that it has the power to “suspend or cancel a firm’s cryptoasset registration on a number of grounds, including where a firm has not complied with obligations under the Money Laundering Regulations.”

On March 7, Binance announced the establishment of its official fiat-to-crypto payments provider ‘Bifinity.’ The new payments arm will allow businesses and merchants to accept payments in cryptocurrencies through API integration.

#Binance is proud to launch @bifinity, a payments tech company powered by #Binance, which will serve as its official fiat-to-crypto payments provider.

Bifinity will partner with @eqonex, @PlugIntoPaysafe and @Checkout in an effort to build the Web 3.0 economy.

— Binance (@binance) March 7, 2022

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