Binance is halting cryptocurrency withdrawals and deposits for its British customers.
The move comes one month after the company temporarily suspended dollar trading, and marks the latest setback for the world’s largest crypto platform.
“Paysafe, our fiat partner that provides GBP deposit and withdrawal services via bank transfers (Faster Payments) and via card (card deposit) to Binance users, has advised us that they will no longer be able to provide these services from May 22nd, 2023,” the company said in a statement provided to PYMNTS Tuesday (Mar. 14).
“These GBP deposit and withdrawal services will be suspended from 3pm on March 13th 2023 for new users. On May 22nd 2023 these services will be suspended for all Binance users.”
In a separate statement provided to PYMNTS, Paysafe said it had “concluded that the U.K. 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.”
Binance says it is working to find an alternative. And while the company argues the move affects fewer than 1% of its customers, Paysafe’s decision is the latest in a series of troubles for a company sitting atop an already troubled industry.
“If Binance’s ability to navigate the industry turmoil and deal with regulators in the U.S. is a test case for the future of crypto, it is looking more murky than rosy,” PYMNTS wrote last week.
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That was after reports that Binance allegedly created its U.S. platform as a shield from regulators, with newly discovered internal messages and interviews from company employees revealing a strategy by the company to position Binance.US as an apparently independent entity in order to protect itself from increasing scrutiny.
A Binance spokesperson told PYMNTS the agreement between Binance and its U.S. operation is common in the crypto word, with Binance’s founders licensing the tech stack to other organizations that weren’t tied to the company.
“While growing at such a rapid pace, we made some initial missteps which have now been rectified,” the spokesperson said. “Following a massive investment in compliance talent, processes, and technology over the past two years, we are a very different company today when it comes to compliance.”
Meanwhile, the crypto industry has found itself dealing with other headaches of late following the collapse of two banks popular with the sector, Signature and Silvergate.
Signature, which was taken over by regulators this weekend, became one of the few banks to welcome cryptocurrency deposits in 2018 and had relationships with major players such as Circle, Coinbase and Kraken.
“Signature’s woes mark another major setback for digital assets as the crypto industry loses yet another of its last remaining on-ramps to the traditional banking system,” PYMNTS wrote.
Signature operated a proprietary payment network called Signet that let commercial crypto clients make real-time, round-the-clock payments. With it gone, many industry observers say crypto firms now have little option than to look to overseas locales.