Binance UK co-owner accuses exchange of inaccurate financial reporting
The co-owner of a UK subsidiary associated with Binance says the exchange filed inaccurate information in its 2020 financials.
The co-owner of a UK subsidiary of Binance alleged that the exchange was “grossly inaccurate” in its 2020 financials. Directors of Dimplx Limited, which was formed as a joint venture with Binance, said that the report did not provide accurate representations of items such as revenue, assets and liabilities.
The report has been filed with the Registrar of UK Companies House. More specifically, it indicates that “the turnover, the assets, the liabilities, including possible tax obligations, the net profits, the nature of the operations and/or transactions with related parties, were not represented with precision”.
Dimplx is a UK stock exchange shareholder. It says the misclassification of information was deliberate and also called into question the financial statements for the period ending April 14, 2022. As such, the shareholder finds it difficult to “determine the current fair value of the stake of Dimplx Limited in Binance Digital”.
Binance has responded to the allegations, telling a news outlet that it was unable to fully respond to the allegations and that it understands “minority shareholders are disappointed that the joint venture was not successful.”
Authorities Examine Binance
The development marks another sticking point for Binance in the UK, which has encountered some hurdles in its attempt to expand into the region. The Financial Conduct Authority (FCA) has warned individuals against using the platform as it does not have a license. He also ordered Binance to stop regulated activities.
In February 2022, the FCA raised concerns about the exchange’s deal with Paysafe, a payments provider. A month later, he raised new 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 UK. He said that Binance would relaunch in the UK within 6-12 months in December 2021.
The UK Doesn’t Take Crypto Regulations Lightly
The UK takes the crypto market very seriously, a market it considers highly speculative. The FCA was straightforward in its assessment of the market. It has taken steps to rein in the market, including warning social platforms to ban financial ads that lead to fraudulent products.
The UK FCA official also believes that crypto promotions need more scrutiny. He believes the regulator needs more power to ensure investor protection. Binance co-founder He Yi thinks the UK is the most stressful region when it comes to crypto regulation. She said the exchange made miscommunications when applying for the business license.
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