Binance Connect to Shut Down on August 16
- Binance Connect was launched in 2022 to provide an easy way to make payments.
- The decision to end the Binance Connect service is due to its provider closing the supporting card payments service.
Binance Connect, the licensed buy-and-sell arm of crypto exchange Binance, will shut down on Wednesday, August 16. Representatives from the exchange confirmed the surprising news in an email statement.
According to the Binance representative,
At Binance, we periodically review our products and services to ensure that our resources continue to be focused on core efforts that align with our long-term strategy. In the last six years, Binance has grown from being an exchange to a global blockchain ecosystem with multiple business lines. We consistently adapt and modify our business approach in response to changing markets and user needs.
Binance launched the Binance Connect service in early 2022. The service was initially called Bifinity and served as a bridge between the traditional financial system and cryptocurrency businesses, facilitating fiat-to-crypto payments. Binance Connect supported over 50 cryptocurrencies at launch, in addition to Visa and Mastercard, and other fiat payment options.
Binance continues its struggles with regulators
The abrupt end of Binance Connect was linked to its provider’s decision to stop accepting credit card payments. Today’s announcement also comes amidst a tough phase for the crypto exchange.
Binance has struggled to maintain positive ties with regulators, especially in the US. Recent reports revealed that the US Department of Justice is considering charging Binance but is concerned about a possible market panic.
The DOJ is concerned that charging Binance could result in a situation comparable to the collapse of FTX, another cryptocurrency exchange. As a result, the DOJ is considering alternate measures like fines or delayed settlements, which it believes will have milder effects on customers than a criminal charge.
In addition, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission are already investigating Binance and its founder, Changpeng Zhao. According to the SEC, Binance ran an unlicensed exchange in the United States that gave Americans access to its offshore platform.
The lawsuit’s main contention centers on Binance’s purported evasion of US laws. The SEC claims Binance altered its Know-Your-Customer (KYC) procedures in order to mask its U.S. customers and evade regulatory scrutiny. Additionally, according to reports, Binance urged US clients to use virtual private networks (VPNs) to disguise their locations and navigate restrictions.
The SEC also charged Binance in a civil lawsuit with breaking multiple federal securities laws. The case highlights the SEC’s position that some cryptocurrencies are “securities” and are, as a result, governed by federal laws.
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.
