Binance informed its users that it is working to find another payment service provider.
Binance, a leading cryptocurrency exchange, has lost its banking partner Paysafe in Europe. Binance partnered with Paysafe in January 2022 after losing Barclays and Santander as banking partners in 2021. Since then, the exchange has been trying to expand its presence and reach in Europe. Consequently, Paysafe’s decision will set back the exchange’s European plans.
Paysafe Is Wary of Regulators
Paysafe and Binance partnered Paysafe owns Skrill and Neteller, two popular e-wallet services that let users deposit and withdraw euros to and from Binance. However, its SEPA services will be unavailable to Binance users in the European Economic Area (EEA) from September 25.
While Paysafe did not give more reasons for its decision, the move comes amid growing regulatory pressure on Binance in many countries, including the UK, Germany, Italy, Japan, and Canada. The exchange also recently ceased its operations in the Netherlands and Cyprus and has been asked to stop its services in Belgium.
Meanwhile, the US SEC has also accused Binance of operating without proper licenses, offering unregistered securities and breaking anti-money laundering rules. While Binance has expressed its disappointment at the SEC, it reiterated that it was committed to working collaboratively with regulators and partners around the world.
Binance’s Woes: Potential Danger to the Crypto Ecosystem
In the meantime, Binance informed its users that it is working to find another payment service provider. It also reiterated that the decision would not affect its other services.
Interestingly, Binance has tried to improve its compliance and governance standards in recent months. The exchange has hired former regulators and bankers as advisers and executives. It also announced plans to set up regional headquarters and obtain licenses in different jurisdictions.
However, some analysts have noted that Binance’s decentralized and global structure makes it hard to regulate and oversee. Others like Tomio Geron, senior reporter at Protocol, believe that Binance’s aggressive expansion into various regions attracted the scrutiny of regulators looking to protect investors.
One thing that everyone agrees on is that Binance’s troubles could hurt the wider crypto industry, as it has a large share of the market volume and liquidity.