Is Binance considering a London-based initial public offering (IPO)?

Binance, a prominent cryptocurrency firm, is shifting its focus away from the stringent US market, following a similar move by its Nasdaq-listed competitor, Coinbase, who recently established a presence in the crypto-friendly territory of Bermuda.

Binance’s Chief Strategy Officer, Patrick Hillman, discussed this issue during a Financial Times summit, explaining that the rigorous and seemingly random enforcement actions by the US Securities and Exchange Commission have created a challenging business environment in the US.

However, the US’s stringent stance may present a lucrative opportunity for the emerging cryptocurrency sector in the UK.

Hillman expressed Binance’s commitment to acquiring regulatory recognition in the UK, a country where Prime Minister Rishi Sunak has been actively promoting cryptocurrency. Sunak has frequently highlighted the UK’s potential to become a “global crypto hub” and initiated discussions in February about regulating the sector while fostering innovation, although there are concerns regarding decentralized finance, compensation, and stablecoin issues.

Binance’s positive remarks about the UK have raised a new question: Could the world’s biggest cryptocurrency exchange be considering an initial public offering (IPO) on the London Stock Exchange?

Binance’s US branch has contemplated an IPO for some time, but approval from US regulators is unlikely.

On the other hand, London policymakers are currently working to simplify standard and premium listing rules to attract international attention to London’s struggling capital markets.

Binance has not issued any comments regarding a potential London IPO, but Proactive has requested a statement.

Former Chancellor George Osborne, who recently interacted with Coinbase CEO Brian Armstrong at the Innovate Finance Global Summit, might also be able to influence Binance.

However, it’s worth noting that Binance has had a troubled relationship with the UK financial watchdog, despite Hillman’s positive remarks about the UK regulatory environment.

In 2021, the Financial Conduct Authority (FCA) directed Binance to halt all activities in the UK, and to date, Binance is not permitted to conduct regulated activities without written approval.

Despite these challenges, Hillman told the Evening Standard that the regulator is currently adopting a “very reasonable, rational approach” to the industry.

Another major obstacle to Binance’s establishment in the UK is the stringent rules imposed by most of the major UK-based financial institutions on fiat-to-crypto platforms, such as Binance.

In November 2022, Banco Santander (LSE: BNC) set a limit of £1,000 per transaction for payments to crypto exchanges, with a total cap of £3,000 over a 30-day period. The Spanish bank is expected to prohibit real-time payments to crypto exchanges later this year.

Similarly, in the same month, NatWest started declining service to business customers who accept cryptocurrencies, including Bitcoin.

From March this year, Nationwide Building Society has imposed restrictions on its customers’ ability to purchase cryptocurrencies, and HSBC has similar limitations in place.

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