According to a recent report by Forbes, Checkout.com, the London-based credit card processing company, has terminated its contract with the largest crypto exchange in the world, Binance, citing concerns over money laundering and compliance issues.
The decision was conveyed through a series of letters sent by Checkout CEO Guillaume Pousaz on August 9 and 11.
The letters referenced reports of regulatory actions and orders in relevant jurisdictions and inquiries from partners. The second letter sent two days after the first, highlighted additional concerns related to Binance’s anti-money laundering (AML), sanctions, and compliance controls. The termination of the contract became effective on August 17.
Binance Considers Legal Action As Checkout.com Terminates Contract
According to the report, Checkout.com’s decision to terminate its association with Binance comes in the wake of Binance’s recent announcement regarding discontinuing its buy-and-sell crypto arm, Binance Connect—an initiative that Checkout.com previously supported.
In response to Checkout.com’s action, Binance disagreed with the grounds for the contract termination and stated that it is contemplating legal recourse.
The exchange also emphasized its commitment to establishing a stable compliance program and fostering trust with regulators and partners. Exchange spokesman Dewi Mustajab said:
We have come a long way to building an industry-leading compliance program and we hope to build more trust with regulators and partners. Checkout’s withdrawal would have “no impact on our services.”
Nevertheless, despite the spokesperson’s assertions, this development represents a notable setback for Binance, given that Checkout.com was previously its largest customer, processing billions of dollars in Binance transactions.
Furthermore, the partnership was pivotal in elevating Checkout.com’s standing as one of Europe’s most valuable payment companies. Binance has faced investigations in multiple jurisdictions and has been dropped by other payment providers, including European payments provider PaySafe in June.
The ramifications of this decision for both companies are yet to be fully realized, but it undeniably constitutes a significant development within the evolving landscape of crypto payments.
It is clear that as Binance grapples with ongoing regulatory scrutiny, the termination of its partnership with Checkout.com adds to the challenges the exchange must confront to rebuild trust and preserve its market position.
Meanwhile, Checkout.com must navigate the consequences of severing ties with a formerly substantial client. The cryptocurrency industry continues to evolve, with compliance and security considerations assuming an increasingly critical role in shaping its future.
Featured image from iStock, chart from TradingView.com