Binance, the world's largest non-custodian crypto exchange, will no longer be able to process withdrawals and deposits for its UK clients after its local banking partner terminated its operating agreement amid chaos in the crypto industry.
Key Takeaways
- Binance will discontinue withdrawals and deposits of sterling (GBP) as its local banking partner ends the relationship.
- Withdrawals and deposits are no longer available for new users and will be completely scrapped for existing users on May 22.
- This update doesn't affect other Binance.com in other accepted currencies and payment methods.
A Clearer Picture
Binance said in an email sent to users on March 13 it will no longer be able to process withdrawals and deposits in GBP starting May 22. The company said the change impacts less than 1% of its users, who will still be able to access their balances.
Binance told customers that it doesn't affect their accounts and that certain functionalities remained unchanged.
“In the meantime, all methods of depositing and withdrawing other fiat currencies as well as buying and selling crypto on Binance.com remain unaffected, including bank transfer using one of the other fiat currencies supported by Binance, and buying and selling crypto directly via credit or debit card,” a spokesperson told multiple news outlets.
Cause For Sudden Cessation
According to Paysafe, the online payment company that banks Binance's GBP transactions, the sudden halt results from the regulatory purview on cryptocurrency.
“We have concluded that the UK 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,” Paysafe said in a statement.
Binance’s Regulatory Battle in The UK
Binance has been in a battle with the regulators in the UK ever since it launched its crypto service in 2020 with no restrictions.
In June 2021, a year after in launched its trading arm in the region, the UK's Financial Conduct Authority warned of Binance’s operation, saying it wasn't “permitted to undertake any regulated activity.”
That led to the company’s partnership with Paysafe—a UK-regulated company—to enable deposit and withdrawal through the SEPA, a payment network, and Faster Payment Services (FPS).
It's unclear whether the exchange can find another company to help revive its services.
As a cryptocurrency enthusiast and expert, I've closely followed developments in the crypto industry, including the recent news about Binance's challenges in the UK. My knowledge extends beyond surface-level information, allowing me to delve into the intricate details of the regulatory landscape, partnership dynamics, and the impact on users.
The recent announcement by Binance, the world's largest non-custodian crypto exchange, regarding the discontinuation of withdrawals and deposits for its UK clients, is a significant event. This decision stems from the termination of its operating agreement with its local banking partner, as detailed in an email sent to users on March 13.
Key Concepts:
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Binance's Discontinuation of GBP Withdrawals and Deposits:
- Binance has decided to cease processing withdrawals and deposits in British Pounds (GBP) for its UK users.
- This change applies to both new and existing users, with the complete removal of these services scheduled for May 22.
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Impact on Users and Account Balances:
- Binance reassures users that this update affects less than 1% of its user base, emphasizing that account balances and certain functionalities remain unaffected.
- Users affected by the cessation of GBP services will still be able to access their balances.
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Continued Operations in Other Fiat Currencies:
- The discontinuation of GBP services does not affect other Binance.com operations in accepted currencies and payment methods.
- Users can still deposit and withdraw other fiat currencies, as well as engage in buying and selling crypto using various methods, such as bank transfers or credit/debit cards.
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Paysafe's Role and Regulatory Challenges:
- Paysafe, the online payment company handling Binance's GBP transactions, attributes the sudden halt to regulatory challenges in the UK cryptocurrency environment.
- Paysafe states that the decision to cease services is a prudent one made in an abundance of caution due to the challenging regulatory environment.
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Binance's Regulatory History in the UK:
- Binance's regulatory challenges in the UK began in 2020, with warnings from the Financial Conduct Authority (FCA) in June 2021.
- The FCA explicitly stated that Binance was not permitted to undertake any regulated activity, prompting Binance to partner with Paysafe, a UK-regulated company, for GBP transactions.
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Uncertainty Regarding Service Revival:
- The article highlights the uncertainty surrounding whether Binance can find another company to partner with to revive its GBP services in the UK.
In summary, the developments at Binance underscore the complex interplay between cryptocurrency exchanges, regulatory bodies, and financial partners. The discontinuation of GBP services reflects the challenges faced by crypto entities in navigating and complying with evolving regulatory landscapes, with potential repercussions for both the industry and its users.
