Although increasingly stringent regulatory reviews of cryptocurrency exchanges have prompted some banks to cut ties with small payment companies, Visa and Mastercard have left open critical gateways between Binance and the financial system.
Barclays with Santander The two largest banks in the UK have used the Financial Conduct Authority’s consumer warning against Binance last month to prevent their customers from sending money to Binance via payment cards in recent weeks.
Some other payment partners have also withdrawn, making it more difficult for customers to transfer funds to Cayman Islands registered exchanges. However, continued access to the two largest credit card systems in the world-usually through intermediary payment companies-means that Binance is still able to provide its customers with an easy way to transfer traditional currencies to exchanges, highlighting its large and flexible network of.
Visa told the Financial Times that it “knows about the FCA’s recent statement on Binance” and is “talking to Binance to monitor developments.” Mastercard stated that “we will continue to monitor this situation, including how the exchange meets its regulatory requirements.”
Neither company prevented consumers (including British consumers) from using payment cards on Binance.com, which is the main Binance exchange.
Binance also provides its customers with Visa-branded debit cards, allowing them to use funds in the crypto wallets of everyday retailers by converting digital assets into typical currencies.
According to the group’s website, Binance cards can be used in many European countries, including Germany, France, Italy, and Spain. It is issued by Contis, a group that cooperates with Visa and provides payment services in the European Union through the so-called electronic money license of the Central Bank of Lithuania. Contis declined to comment on its relationship with Binance.
Binance insists that it takes its “legal obligations” very seriously.
After several regulatory agencies around the world suppressed the company, the exchange’s connection with traditional finance has attracted a lot of attention. The British financial regulator stated that Binance has no right to operate crypto-asset businesses in the country, while other jurisdictions have warned that the group is not subject to the supervision of its financial regulator. Thailand has filed a criminal lawsuit against Binance, accusing it of operating in this Southeast Asian country without a license.
Italian securities regulator Consob joins the chorus Thursday, Stating that “Binance Group companies are not authorized to provide investment services and activities in Italy, not even through the website www.binance.com”.
Binance usually uses traditional currency channels through payment partners such as Checkout.com and Clear Junction, which themselves have direct or indirect connections with major payment networks.
As the organization faces criticism, some of these relationships have begun to break down Its approach Prevent potential money laundering, terrorist financing and fraud on the platform.
Clear Junction, once an important European payment partner of Binance, said on Monday that it would “no longer provide convenient payment for the company.” This organization provides Binance with access to Sepa, a European payment network that allows euro transfers between three countries, and Faster Payments, a similar company in the UK that facilitates pound transfers between Main Street banks .
Dima Kats, chief executive of the London-based group, told the Financial Times that Clear Junction’s decision to stop providing Binance payment services was triggered by FCA’s consumer warning. According to people familiar with the matter, BCB Group, another British payment company focused on the crypto industry, also ended its relationship with Binance earlier this year. Binance declined to comment on this matter.
As of Thursday, customers cannot withdraw or deposit euros or pounds through Faster Payments or Sepa. Binance stated that it “is providing payment services to our users as soon as possible.”
Binance CEO Changpeng Zhao said in an open letter last week that the company “grows very rapidly, but we don’t always do everything well.” But he vowed to take steps to improve the situation, including doubling the number of compliance personnel by the end of the year and deploying new technologies and control measures.
He said that the group has “passed a number of external anti-money laundering audits.”
Adam Samson’s contact information is [email protected] Or on Telegram @adamsamsonFT.
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