Barclays and Santander – two of Britain’s biggest lenders – have in recent weeks blocked their clients from sending funds to Binance through their payment cards, citing a consumer alert issued last month by the Financial Conduct Authority against Binance.
Some other payment partners have retreated as well, making it more difficult for customers to transfer money to and from the Cayman Islands built-in exchange. But continued access to two of the world’s largest credit card systems – typically through intermediary payment companies – means Binance is still able to offer its customers an easy way to transfer conventional currencies to the exchange, highlighting its sprawling and resilient network.
Visa told the Financial Times that she was “aware of the recent FCA statement regarding Binance” and was in “dialogue with Binance to monitor developments.” Mastercard said “we are continuing to monitor this situation, including how the exchanges are meeting their regulatory requirements.”
Neither company prevents consumers, including those in the UK, from using payment cards on Binance.com, Binance’s main exchange.
Binance also offers its customers a Visa-branded debit card that allows them to use funds from their crypto wallets at everyday retailers by converting digital assets into typical currencies.
The Binance card is available in many European countries, including Germany, France, Italy and Spain, according to the group’s website. It is issued by Contis, a partner group of Visa and providing payment services in the EU via an e-money license from the Central Bank of Lithuania. Contis declined to comment on his relationship with Binance.
Binance claimed that it takes its “legal obligations very seriously.”
The stock market’s links to mainstream finance have garnered increased attention after several regulators around the world cracked down on the company. The UK financial regulator has said Binance is not licensed to run a crypto-asset business in the country, while other jurisdictions have warned the group is not regulated by their financial watchdogs. Thailand has filed a criminal complaint against Binance for allegedly operating in the Southeast Asian country without a license.
Italian securities regulator Consob joined the chorus on Thursday, declaring that “companies in the ‘Binance group’ are not allowed to provide investment services and activities in Italy, not even through the website www. binance.com ”.
Binance has typically operated conventional foreign exchange channels through payment partners such as Checkout.com and Clear Junction, which themselves have direct or indirect connections with major payment networks.
Some of those links have started to unravel as the group has come under fire for its practices aimed at preventing potential money laundering, terrorist financing and scams on its platform.
Clear Junction, which had been a major European payments partner for Binance, said on Monday that it would “no longer facilitate payments” for the company. The group had provided Binance with access to Sepa, a European payments network that allows transfers in euros between three dozen countries, and to Faster Payments, a British equivalent that facilitates transfers in pounds sterling between major banks.
Clear Junction’s decision to stop providing Binance payment services was triggered by FCA’s warning to consumers, Dima Kats, the London-based group’s chief executive, told the Financial Times. BCB Group, another UK-based payments company that focuses on the crypto industry, also ended its relationship with Binance earlier this year, according to a person familiar with the matter. Binance declined to comment on the matter.
As of Thursday, customers could not withdraw or deposit euros or pounds sterling through Faster Payments or Sepa. Binance said it is “working as quickly as possible to make payment services available to our users.”
Changpeng Zhao, CEO of Binance, said in an open letter last week that the company “has grown very quickly and we haven’t always figured it out exactly.” But he pledged to take steps to improve the situation, including doubling the number of compliance staff by the end of the year and rolling out new technology and controls.
He said the group had already “authorized several external anti-money laundering audits.”
Adam Samson can be contacted at [email protected] or on Telegram @adamsamsonFT.
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