On August 16, Binance Connect was shut down following Checkout.com’s discontinuation of support to the crypto exchange.
On August 18, a spokesperson for Binance revealed that the crypto exchange is contemplating legal action against Checkout.com, its ex-payment provider.
The likely legal dispute is linked to letters sent on August 9 and August 11 by Checkout.com. A report by Forbes shows that the financial technology company’s chief executive officer, Guillaume Pousaz, terminated its relationship with Binance.
Binance Loses Checkout.com as Partner Cites Sanctions and Anti-money Laundering
The discontinuation is attributed to actions by regulators and orders in pertinent jurisdictions. Besides, issues such as sanctions, anti-money laundering, and compliance controls evoked the end of the relationship.
Via an email, a Binance spokesperson claimed they did not support Checkout’s alleged reason for termination and were contemplating options for legal actions. They also clarified that on- and off-ramp services were still available at the exchange.
Nevertheless, ending the business relationship resulted in the closure of Binance Connect, a regulated crypto purchase-and-sell operation, on August 16. It was introduced in March 2022 and was a fiat-to-crypto payment provider that bridged crypto companies to the traditional finance system by supporting more than 50 fiat transactions and cryptocurrencies.
Forbes claims that in 2021, Checkout.com had Binance as its primary client and handled nearly $2 billion transactions in one month.
Binance Face Mounting Regulatory Challenges
Over the past few months, Binance’s operations have experienced debanking, causing most of its international branches to struggle to get partners. In June, the firm declared that Paysafe Payment Solutions, its euro banking partner, would sever support in Europe.
In June, its local branch in Australia was severed from the banking system without prior consultation or notice. In the U.S., Binance US allegedly encountered challenges getting banking partners. Amid the banking crisis earlier this year, Silvergate and Signature Bank, its ex-partners, were shut down.
Via an interview, Changpeng Zhao, Binance’s chief executive officer, claimed that the current crisis had prompted him to contemplate purchasing a bank.
Legal and business troubles in Binance seem to be far from over. On June 5, the United States Securities and Exchange Commission (SEC) sued the exchange and its chief executive officer over allegations of contravening securities regulations and providing unregistered securities in the nation.
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