Binance Halts Sterling Deposits and Withdrawals
On Tuesday, Binance, the world’s largest crypto exchange, confirmed that it had stopped dollar transfers. This came after Binance’s partner for sterling transfers, Paysafe, informed them that it would discontinue its services from May 22. As a result, all Binance customers are affected by this decision. Additionally, new users are no longer able to make sterling transfers, as this service was suspended on Monday.
Binance has assured its customers that they will still be able to access their GBP balances, despite the recent change which is said to impact less than 1% of the total user base. The company is currently looking for an alternative solution to enable sterling transfers.
The cessation of sterling transfers, first reported by crypto news outlet The Block, is the latest in a growing crackdown on crypto by U.S. authorities. Binance last month suspended all dollar bank transfers amid a crackdown on crypto by the Justice Department.
The Department is also investigating Binance, run by billionaire CEO Changpeng Zhao, for suspected money laundering and sanctions violations, Reuters has previously reported. A top Binance executive told The Wall Street Journal that the company is still committed to its U.S. customers and plans to resume transfers “as soon as possible.”
A further hindrance for Binance in accessing dollars came after the U.S. Securities and Exchange Commission told the company which issued its “BUSD” stablecoin it was considering taking action against it. The move sparked around $6 billion in outflows as of earlier this month.
The importance of sterling funding to Binance is unclear. The company does not make public its finances, with the core of the business – the giant Binance.com exchange – mostly hidden from public view.
Why is sterling funding so important to Binance? No one knows for sure, as the company keeps its finances largely hidden from public view. All we know is that the Binance.com exchange is the core of their business, and it’s mostly hidden from view.
Paysafe did not immediately respond to a request for comment from Reuters. The company offers the service via UK payments network Faster Payments, which also had no immediate comment. A spokesperson for Skrill, the Paysafe unit that works with Binance, told crypto website Decrypt 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.”
Britain’s financial watchdog, the Financial Conduct Authority (FCA), has been increasingly vocal about its concerns over crypto, warning in a report in June that “there is a risk that investors may lose all of their money” if they buy digital currencies issued by companies.