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Binance Loses Major EUR Banking Partner amid Regulatory Concerns
Binance has announced that its euro banking partner, Paysafe Solutions, will stop supporting payments for the cryptocurrency exchange from September 25. The development follows concerns by the UK's financial regulator over Binance's use of the country's payment network.
"Following this date, you will be required to use new banking details to make EUR deposits into your Binance fiat wallet and may be required to accept new terms and conditions," the exchange notified users.
Payments via SEPA Network Affected
However, Binance clarified that only the euro deposits and withdrawals functions provided by Paysafe, such as through Bank Transfer (SEPA), were affected, and not any other fiat deposits or withdrawals services. The abbreviation for Single Euro Payments Area, SEPA is a cross-border payments network in the European Union.
In January, Binance and Paysafe entered into a partnership that enabled the cryptocurrency exchange to access Faster Payments Service, a payments network that connects financial services providers in the UK. Besides that, the partnership allowed Binance to access the SEPA payment network.
However, according to a report by the Financial Times, the Financial Conduct Authority (FCA) expressed concerns about the deal. In an earlier comment, the FCA said that Paysafe was aware of the concerns and the company was subject to close supervision.
Securing payment services through fiat currencies has always been a concern for unregulated cryptocurrency companies, especially Binance. Scrutiny by the regulators such as the FCA often forces banks and financial service providers to withdraw their support. The situation has worsened with the mounting regulatory pressure Binance faces globally.
Binance Faces Regulatory Troubles
For instance, Binance, its affiliated entities, and its CEO and Co-Founder, Changpeng Zhao, are facing several charges brought by the US Securities and Exchange Commission (SEC). Some of the allegations include operating an illegal trading platform, offering unregistered securities, and comingling customers' funds, Finance Magnates recently reported.
Since the SEC sued Binance, the FCA has canceled several permissions issued to the exchange's affiliate in the UK. Moreover, the exchange has announced that it is retreating from the Netherlands and Cyprus. Similarly, Belgium's regulator has ordered Binance to cease operations in the country, while in France, the company is facing money laundering allegations.
This article was written by Jared Kirui at www.financemagnates.com.
