- Binance.US has partnered with MoonPay to provide fiat ramps for its customers.
- The new solution creates new challenges for customers.
- Binance.US’ market share has nose dived in recent months.
The SEC case against Binance has significantly impacted the exchange’s U.S. affiliate. In July 2023, Binance.US was forced to switch to a crypto-only model as banking partners fled.
Sponsored
A month after this transition, Binance.US has turned to MoonPay to combat its banking troubles. While the partnership promises to provide seamless workarounds for users to access the platform through traditional payment rails, it also presents new challenges.
High Fees
In a blog post on Tuesday, August 22, Binance.US revealed that it had entered a new partnership with MoonPay to allow users to fund their account with USDT using traditional payment methods, including debit and credit cards, Google Pay, and Apple Pay.
The new partnership also offers a “cash out” service that allows users to convert USDT to USD, which they can withdraw directly to their bank accounts via ACH, provided by unspecified partners with MoonPay facilitating orders from $30 and above.
The new partnership appears to work as a salve for Binance.US’s banking problems but comes with significant obstacles that could serve as barriers to adoption.
In exchange for the convenience it provides, MoonPay is known to charge some of the highest fees in crypto, as was quickly highlighted by users in response to the exchange’s announcement.
MoonPay typically charges 4.5% or a minimum of $3.99 for card payments, per its support page. For Binance.US, however, this rate is reduced to 3.49% or a minimum of 0.5% plus $1.99 at launch. Despite the 1% discount, the fee remains significantly higher than other solutions. Additionally, the exchange cautions that the fee discount is temporary.
The challenges the new fiat ramp poses do not end here, with traditional banking providers showing resistance.
Not All Banks Take Kindly to Crypto Transactions
MoonPay’s service depends on banks to process card transactions, but not all banks favor crypto transactions, sometimes declining and flagging legitimate transactions. Acknowledging these complications, Binance.US conceded:
"Depending on your credit card issuer's policy, you may experience failed or declined transactions. If you encounter issues with your credit card, we suggest trying a debit card as an alternative," the exchange writes in its statement.
As recently as July, there were reports that Bank of America was closing accounts of users who engaged in crypto transactions.
Accessible and cost-efficient ramps are critical to sustaining liquidity on exchanges. Binance.US’ market share in the U.S. has reportedly tanked from 22% to less than 1% since April.
On the Flipside
- Users can still deposit crypto directly from self-custody wallets and other exchanges.
- Crypto firms have generally found it difficult to maintain banking relationships following the collapse of crypto-friendly banks like Silvergate, Signature, and Silicon Valley in March 2023.
Why This Matters
Following the SEC lawsuit against Binance, Binance.US customers quickly faced inconveniencing adjustments. Banks have since ceased support for the crypto exchange, closing fiat ramps. The MoonPay partnership aims to tackle this challenge, presenting a new method.
Read this to learn more about Binance.US’ troubles following the SEC lawsuit:
SEC Case Continues to Weigh on Binance.US as BTC, USDT Trade at Discount
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