- Binance has shut down its crypto payment service.
- The decision has attracted significant scrutiny despite the firm’s assurances.
- Binance has struggled to maintain banking relationships in recent months.
Binance, as the world’s largest exchange, is continuously under scrutiny and hardly fails to get tongues wagging with its decisions.
On Tuesday, August 15, the crypto exchange confirmed that it would shut down Binance Connect, its fiat-to-crypto payment service. While the crypto exchange has spun the move as a strategic effort to focus on “core products,” the bulk of the crypto community does not appear convinced.
The situation is not helped because Biswap, a decentralized exchange on Binance’s BNB chain that first revealed the crypto exchange’s decision, asserted that the firm was closing the service because a key partner had ceased card support.
Binance Decision Met with Skepticism
Responding to Binance’s decision to close its payment service, vocal Binance critic and Cinneamhain Ventures partner Adam Cochran opted to take a jab at Binance CEO Changpeng “CZ” Zhao, writing:
"Inb4 CZ says '4 this is just because we are so successful and so profitable that we need to do less to do more!"
Cochran was not alone in his skepticism of Binance’s statement as prominent crypto commentator Napgenus ursus implied that contrary to the exchange’s statements, the decision to shut down Binance Connect was tied to Binance’s mounting banking troubles.
Binance has faced significant trouble securing and maintaining banking partners following the collapse of Signature Bank and Silvergate in March 2023. The situation has worsened as regulatory walls appear closing on the exchange.
Following lawsuits from the U.S. CFTC and SEC, the U.S. affiliate of the crypto exchange lost its partnership with the primary provider of its fiat rails in June, prompting a switch to a crypto-only model. The firm also faces a similar situation in Australia, where it was forced to cancel its derivatives license amid a targeted review from the Australian Financial Complaints Authority (ASIC).
On the Flipside
- Binance’s decision comes as PayPal has increased its involvement in crypto payments by launching a stablecoin.
Why This Matters
The reactions trailing Binance’s decision to shut down Binance Connect underscore the uncertainty surrounding the crypto exchange as it continues to draw the ire of regulators worldwide.
Read this to learn more about Binance’s banking troubles:
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