Binance Security Breach: Consumer Exposure and Interim Safeguards

Debate between Lord Pitt-Watson and Lord Nagaraju

Tuesday 3rd November 2026 Lords Chamber

[Lord Nagaraju (Lab)]

My Lords, I declare my interests in AI and technology as set out in the register, and I beg leave to ask the Question standing in my name on the Order Paper.

[The Parliamentary Secretary, HM Treasury (Lord Pitt-Watson) (Lab)]

I welcome this Question. The Government are closely monitoring developments following the Binance security breach and are engaging with the Financial Conduct Authority and other authorities to assess the implications for the UK. Binance is not authorised or registered to provide crypto asset services to the UK. However, it is possible that UK customers may still have been affected, and the Government are currently working to understand the associated impacts and risks.

--- Later in debate ---

[Lord Nagaraju (Lab)]

My Lords, given that a large number of UK consumers engage with crypto assets and that the new regulatory regime will not take full effect until October 2027, will the Minister commit today to working with the FCA, the National Cyber Security Centre, the Bank of England and other relevant authorities to put effective transition arrangements in place now and publish a clear interim cyber security and consumer protection plan with a timetable before the end of this year?

[Lord Pitt-Watson (Lab)]

We are looking to learn from what happened at Binance, but I am not clear that it makes sense to put in an interim arrangement. By October next year, we will have a comprehensive FCA regime for crypto assets, including disclosure, market abuse and resilience. To put that in place requires changes by the firms, and it then requires authorisation. There will be an iterative process there, and I think it might not be helpful to have an interim regime in the middle of that. It would perhaps slow things down.