According to reports, leading cryptocurrency exchange Binance is weighing its options for taking legal action against Checkout.com, its former payment processor, for severing ties with the exchange. According to sources, Checkout.com sent a letter to Binance expressing concerns about the exchange’s recent regulatory issues. Guillaume Pousaz, CEO of Checkout.com, decided to end the partnership due to allegations that Binance facilitated money laundering and may face sanctions for violating US laws. This development highlights the growing scrutiny that cryptocurrency exchanges face from financial regulators and the need for payment processors to ensure they operate within legal boundaries.
A Binance spokesperson said the exchange does not agree with Checkout.com’s reasoning for terminating the partnership and will consider pursuing legal actions.
The Binance spokesperson said in a statement:
As of Aug. 16, 2023, Checkout.com is no longer servicing Binance as a payment service provider. There is no impact on our services, and users can continue to use on- and off-ramps as usual. We do not agree with Checkout’s purported basis for termination and are considering our options for legal action.
Binance recently announced that it had shut down Binance Connect, its licensed crypto buy-and-sell arm. Checkout.com helped facilitate the service. Binance launched Binance Connect in early 2022 to serve as a fiat-to-crypto payment provider, connecting crypto companies with the standard banking system. The Connect service supported over 50 cryptocurrencies and fiat transactions.
Binance is under increased pressure due to recent allegations. The popular cryptocurrency exchange platform and its US subsidiary, Binance.US, are facing legal action from the US Securities and Exchange Commission, which claims that they have been operating as an unregistered exchange and offering unregistered securities. This development adds to Binance’s growing list of challenges, and it’s unclear how the company will address these concerns.
Binance is under investigation in France, and the company has also faced regulatory scrutiny in other European countries. Binance has withdrawn its services from several European countries, including Germany, the Netherlands, and Cyprus, in recent weeks. This increased scrutiny outside of the U.S. adds to Binance’s growing list of regulatory challenges.
Binance remains committed to complying with local regulations and strengthening its relationships with regulatory authorities, despite concerns about its ties with regulators. A spokesperson for the exchange has stated that Binance will continue to work collaboratively with regulators and partners worldwide to ensure clarity and provide the best possible services and protections for its users.
Binance Faces Debanking of its Operations
Binance, a popular cryptocurrency exchange, has been facing challenges in recent months due to a debanking of its operations. As a result, several of its subsidiaries are struggling to find financial partners. Binance.US, in particular, has been trying to replace Silvergate and Signature Bank with another financial service provider in the US. However, this has proven to be a difficult task, further complicating Binance’s operations.
Binance has faced significant challenges in recent months, with both its platforms collapsing due to the US banking crisis earlier this year. Additionally, the exchange lost its euro banking partner, Paysafe Payment Solutions, in June. Binance has also encountered troubles in Australia, where its operations were brought to a halt after being suddenly cut off from the country’s banking system.
