Paysafe’s splitting from Binance results in users being requested to transfer their euro balances to Tether’s USDT.
Binance requested users of European Paysafe to change their euro balance to USDT, Tether’s dollar-pegged stablecoin, before October 31. The crypto exchange noted that this decision was made after Paysafe, its banking partner, ‘individually decided to cease processing euro deposit for Binance users.’
Paysafe Terminates Euro Deposits Agreement with Binance
On September 25, Paysafe indicated its intent by halting euro deposits. Before that, the company ran Binance’s European user’s fiat withdrawals and deposits. The crypto exchange claimed the situation would be provisional. A spokesman revealed that Binance is replacing its fiat partner for euro services.
The representative added that several days are required to complete the process, and the firm will offer regular updates to all affected users to alert them when total functionality can be reinstated. Further, they claimed that the firm is eager to have the new fiat partner operating within the shortest time possible.
The services entail bank transfers routed via the EU’s Single Euro Payments Area (SEPA) platform.
Binance Accuses Paysafe of Interrupting Services for Euro Users
In its public statement, Binance claimed that Paysafe’s unexpected and unfathomable decision would temporarily interrupt services and expressed regret for any trouble. Since Thursday at 4 a.m. UTC, the trading of euro spot trading pairs is impossible, and all open orders have been scrapped.
Binance Convert, another Binance feature resembling a token exchange, is also facing restrictions on euro transactions. Nevertheless, users’ ability to withdraw Euros balances within Binance to their respective banking accounts will still be possible.
Binance’s latest communication comes amid disruptions linked to Paysafe impacting operations across several nations. On Monday, Binance France’s representative claimed that users are being encouraged to transfer their holdings into crypto without additional fees.
Binance Pursues Other Fiat Partner for Euro Services
Since the beginning of this week, Binance France users’ use of bank transfers for euro deposits or withdrawals has been impossible. In May, Paysafe ceased supporting British pound transactions. The decision came amid concerns from the United Kingdom’s financial regulators. Further, in June, the firm publicized its departure from the Netherlands following the failure to acquire a virtual asset service provider (VASP).
The decision was succeeded the same month by Belgian officials’ orders. In this case, the crypto exchange was instructed the crypto exchange to halt operations in their jurisdiction following accusations of failing to adhere to local guidelines. Nevertheless, Binance has since recommenced registration of new users in Belgium.
Binance Confronts Regulatory Challenges in Australia
The problems Binance encounters are not limited to Europe alone. Last June, Binance Australian also halted the deposit and withdrawal of the Australian dollar (AUD) through bank transfer. Additionally, on September 27, Binance pulled out of Russia following the sale of its business to CommEX, a new crypto exchange. The decision came amidst concerns regarding Binance purportedly not adhering to financial sanctions against Russia.
In the meantime, Binance encounters legal troubles in the United States. On June 5, a lawsuit against Binance, as well as its linked entities, was filed by the United States Securities and Exchange Commission (SEC). According to the agency, the platform traded unregistered securities and carried out unapproved activities in the United States.
The SEC’s legal action comes after an earlier lawsuit by the Commodities Futures Trading Commission (CFTC) only three months before. In this case, Binance was accused of failing to register with the agency and contravening most of its guidelines.
The case threatens to cause ramifications across the digital assets ecosystem, with concerned parties, including Circle, filing an amicus brief to the court. The firm behind the second largest stablecoin, USD Coin (USDC), disputes the security label. Circle deconstructed the Howey Test to demonstrate stablecoin is neither an investment contract nor issue expecting profits.
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