Binance, the world’s largest cryptocurrency exchange by trading volume, has temporarily halted deposit and withdrawal services for its customers in the United Kingdom using bank transfers and card payments.
The move comes in response to the decision by its local banking partner to cease support for transactions in British pounds, leaving Binance customers in the UK unable to access their funds.
Why Binance Stopped UK Transactions
Binance has taken this action in response to an announcement by its UK payment processor Paysafe that it will no longer provide its customers with an embedded wallet option.
Paysafe said in a statement:
“We have concluded that the UK regulatory environment in relation to crypto is too challenging to offer this service at this time and so this is a prudent decision on our part taken in an abundance of caution.”
Both Paysafe and Binance assured their UK customers that they have additional deposit options open to them.
Paysafe, the parent company of Skrill and a public company listed on the New York Stock Exchange, released its quarterly earnings last week. In 2022, the firm processed $130 billion in payments, a 6% increase over 2021.
Not The First GBP Fallout
Prior to establishing its UK-based trading platform, the crypto exchange added GBP trading pairs in 2020. At the time, UK customers may use Binance to make a pound-to-cryptocurrency conversion via Binance Jersey, an offshore financial center located between England and France that offers advantageous tax treatment for cryptocurrency trading.
However, in June 2021, the Financial Conduct Authority in the United Kingdom demanded that Binance Markets Limited, the company’s British subsidiary, cease “any regulated activity” without the FCA’s prior written authorization.
Users were unable to add British pounds or Euros to their accounts until March of 2022. About this time last year, the exchange resumed support for Euro and Pound sterling deposits and withdrawals through its fiat partner, PaySafe’s Skrill.
A company representative informed Bloomberg that the company is looking into providing affected users with an alternative solution.
Binance’s Regulatory TroublesThe crypto exchange has been the subject of investigations by financial regulators in several jurisdictions, including the UK and the U.S.
In the UK, the FCA has ordered Binance to halt all regulated activities in the country. This decision came after the FCA found that Binance lacked adequate anti-money laundering controls and failed to adequately protect its customers from financial crime risks.
Similarly, in the U.S., the Commodity Futures Trading Commission (CFTC) has reportedly launched an investigation into whether Binance allowed Americans to trade derivatives that are not registered with the agency.
The company has since stated that it takes compliance seriously and is committed to working with regulators to address any concerns they may have.
-Featured image from PYMNTS