Crypto

Binance miffed as payments provider pulls the plug

Checkout.com doesn’t want to work with the cryptocurrency exchange anymore

The Binance cryptocurrency exchange is contemplating legal action against former payment provider Checkout.com. According to a spokesperson’s statement on August 18, the company isn’t pleased with the provider’s decision to walk away and break its contract.

The possible legal conflict emerged after letters from Checkout.com were sent to Binance on August 9 and 11. Checkout.com CEO Guillaume Pousaz terminated the relationship with Binance, noting “reports of regulators’ actions and orders in relevant jurisdictions” and worries about sanctions, compliance rules, and anti-money laundering, according to a report by Forbes.

In an email sent by a Binance spokesman, the company said: “We do not agree with Checkout’s purported basis for termination and are considering our options for legal action.” Binance also explained that on-ramp and off-ramp services will still be available for customers.

The end of the companies’ relationship forced the shutdown of Binance Connect on August 16. Since March 2022, it operated as a fiat-to-crypto payment provider, supporting fiat transactions and over 50 cryptocurrencies. Checkout.com was once Binance’s biggest customer, managing about $2 billion in monthly transactions in 2021.

Over the past several months, Binance has experienced de-banking of its procedures, as several global branches are laboring to find partners. The exchange also announced in June that euro banking partner Paysafe Payment Solutions would end its European support.

Without warning, the Binance local branch in Australia was cut off from the banking system in June. Binance.US also faced problems finding banking partners after Signature and Silvergate Banks were closed amid the 2023 banking crisis. The persisting problem has even provoked Binance CEO Changpeng Zhao to ponder buying a bank, which he disclosed during a recent interview.

Binance also has more legal troubles to be concerned about. The SEC sued the company and CEO on June 5, stemming from allegations it violated securities laws by offering unregistered securities in the U.S.

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