Binance Announces Plans to Sue Its Former Payment Provider
- Binance recently shut down Binance Connect.
- Forbes claims that in 2021, Binance was Checkout.com’s top customer, moving almost $2 billion in transactions in a month.
Crypto exchange Binance is reportedly considering taking legal action against Checkout.com, which served as its former payment processor. Checkout.com is said to have informed Binance in a letter about its concerns about the crypto exchange’s recent troubles with regulators. Guillaume Pousaz, CEO of Checkout.com, called off collaborations with Binance due to claims that Binance aided money laundering and could face sanctions for violating US laws.
A Binance spokesperson said the exchange does not agree with Checkout.com’s reason for terminating their partnership and will consider legal actions to address it.
The Binance spokesperson said in a statement:
As of Aug. 16, 2023, Checkout.com is no longer servicing Binance as a payment service provider. There is no impact on our services, and users can continue to use on- and off-ramps as usual. We do not agree with Checkout’s purported basis for termination and are considering our options for legal action.
Binance recently announced that it had shut down Binance Connect, its licensed crypto buy-and-sell arm. Checkout.com helped facilitate the service. Binance launched Binance Connect in early 2022 to serve as a fiat-to-crypto payment provider, connecting crypto companies with the standard banking system. The Connect service supported over 50 cryptocurrencies and fiat transactions.
Today’s report adds to Binance’s mounting pressure and concerns. The crypto platform is facing one of the most difficult phase of its existnce. For example, the US Securities and Exchange Commission recently filed a complaint against Binance, claiming that the exchange, along with its US subsidiary, Binance.US, and CEO Changpeng Zhao, functioned as an unregistered exchange and provided unregistered securities.
Binance has also faced increased scrutiny outside the U.S. In June, French authorities revealed that the crypto exchange was the subject of an investigation. Binance also withdrew its services from different European countries in recent weeks, including Germany, the Netherlands, and Cyprus.
Despite concerns about its ties with regulators, Binance has maintained that it prioritizes complying with local policies and improving its relationships with authorities. A spokesperson for the exchange said Binance would continue “to collaborate with regulators and partners around the world to ensure clarity and the best services and protections for our users.”
Binance Faces Debanking of its Operations
Binance has faced a debanking of its operations in recent months, making it difficult for a number of its subsidiaries to find financial partners. Binance.US has struggled to replace Silvergate and Signature Bank with another financial service provider in the US.
Both platforms collapsed due to the banking crisis in the US earlier this year. In addition, Binance lost Paysafe Payment Solutions, its euro banking partner, in June. Binance has also faced troubles in Australia. The crypto exchange’s operations came to a halt after it was suddenly cut off from the country’s banking system.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
