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Binance UK in trouble after co-owner claims exchange misrepresented reports

The co-owner of a Binance-affiliated U.K. business claimed that the exchange had submitted its 2020 financial statements with false information.

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The co-owner of a Binance-affiliated U.K. business claimed that the exchange had submitted its 2020 financial statements with false information. The Binance's (1) U.K. subsidiary co-owner said the exchange's 2020 financial statements were grossly false.

Are the reports correct?

The reports don't give realistic depictions of items like turnover, assets, and liabilities, according to the directors of Dimplx Limited, a company created as part of a joint venture with Binance. The report was sent to the registrar of the U.K. Companies House. Binance Digital's turnover, assets, and liabilities, including prospective tax obligations, net earnings, nature of operations, and linked party transactions, were not fairly represented, according to the lawsuit.

The exchange's U.K. shareholder Dimplx claims that the material was intentionally misfiled and casts doubt on the financial accounts for the period ending on April 14, 2022. Determining the current fair value of Dimplx Limited's ownership interest in Binance Digital is therefore challenging for the shareholder. In response, Binance told a media outlet that it could not address the claims completely but did appreciate that "the minority shareholders are dissatisfied that the joint venture did not yield fruit" and that it could not do so.

Regulators  looking into Binance

The change is another difficulty for Binance in the U.K., which has already encountered several challenges when trying to grow there. Advisory from the Financial Conduct Authority (FCA) (2) People were about to utilize the platform because it was unlicensed. Binance was also told to stop engaging in certain activities. The FCA expressed worry over the exchange's agreement with payment processor Paysafe in February 2022.

It sparked new questions regarding a collaboration between EQONEX (3), a provider of financial services, and a subsidiary of Binance called Bifinity a month later. Changpeng Zhao, the CEO of Binance, has made it apparent that the exchange intends to run in the United Kingdom. In December 2021, he said, Binance will debut in the United Kingdom.

Is the UK viewing this issue causally?

The U.K. views the cryptocurrency industry as particularly speculative and is thus treating it very seriously. When evaluating the market, the FCA was direct. It has stopped social media networks from running financial adverts promoting counterfeit goods. The head of the UK FCA agrees that there should be more regulation of crypto marketing. He thinks that to guarantee investor protection, the regulator needs broader authority. The U.K., according to co-founder of Binance He Yi, is the country with the strictest regulations for cryptocurrencies. She said that throughout the application for a license to operate, there had been miscommunications in the transaction.