Some banks, including Barclays and the UK branch of the Santander bank, have also blocked their customers from using their cards on the Binance exchange.
The woes of Binance multiplied on Monday as a European payment provider Clear Junction withdrew support for the trading platform. The largest crypto exchange by trading volume had in recent weeks come under fire as regulators brought down the hammer on their operation.
In a statement released by the payment provider, Clear Junction, the firm announced its suspension of GBP and EUR payments and made it known it will no longer allow transactions related to the cryptocurrency exchange. The statement released on the company website further read, “Clear Junction acts in full compliance with FCA regulations and guidance in regard to handling payments of Binance.”
Binance Regulatory Challenges
This suggests that the decision was taken based on the development with the FCA. Recall that the FCA had in June asked Binance Market Limited to stop all operations within its jurisdiction. It warned UK citizens against transacting with BML, as its activities were not being regulated by the institution.
Other regulators, including the Thailand Securities and Exchange Commission (SEC), the Cayman Islands Monetary Authority (CIMA), and other regulators in the United States, Canada, Japan, and even Poland, had all issued warnings against trading with the platform. Some banks, including Barclays and the UK branch of the Santander bank, have also blocked their customers from using their cards on the exchange.
While these regulators cannot really regulate cryptocurrency trading because of the decentralized system on which it runs, the trading of derivatives like futures comes under their jurisdiction.
The exchange had in response to the regulatory issues attempted to clarify its corporate structure. Speaking on the regulatory issues, the founder and Chief Executive Officer of Binance Changpeng Zhao had stated that Binance Marketing Limited was a separate outfit from Binance, and tried to dissuade clients and customers from being overly worried by the development. The company also noted in a tweet that the notice by the FCA did not affect services offered on Binance.com.
Indeed, there has been no unusually large-scale movement of tokens from the platform. This is unlike in 2017 when an onshore regulatory crackdown by China led to a panic movement. This is perhaps a testament to Binance truly being a global operator and a decentralized market.
While some believe that the crackdown on Binance is indicating what is to come against the digital currency ecosystem from regulators, others opine Binance is responsible for its woes, noting that till today, the exchange does not even have a known headquarters.