Binance Connect Shut Down Due to Changing Market Needs

Updated: 16 August 2023

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Binance has shut down crypto payment service Binance Connect only a year after its launch, citing changing market needs.

Previously known as Bifinity, the crypto payments service is set to be disabled on August 16th, with Binance saying the closure will enable it focus on core products and long-term goals.

“We consistently adapt and modify our business approach in response to changing market needs”, said a Binance spokesperson in an email to CoinDesk.

BNB-based decentralized exchange Biswap tweeted that it would disable Binance Connect, adding that the change “aligns with the strategic effort of Binance to focus on its core businesses.”

Dear Biswappers,

The Biswap team keeps abreast of the latest DeFi news and aims to inform you right away.

After a thorough consideration, @binance has made a difficult decision to disable @Binance_Connect on 15 August due to its provider closing the supporting card payments… pic.twitter.com/HcooyLn4sg

— Biswap (@Biswap_Dex) August 15, 2023

Binance Connect Was a Concern For Regulatory Authorities from Day 1

Launched as Bifinity in March 2022, Binance Connect acted as a bridge between crypto and traditional financial institutions and provided fiat-to-crypto payments provider services. Supporting 50 cryptocurrencies at the time of launch, it also supported fiat payment methods using VISA and Mastercard.

Soon after its launch, however, it drew criticism from UK’s FCA due to Bifinity providing a $36 million convertible loan to crypto investment firm Equinox, a Nasdaq-listed entity.

Stating that Binance Markets Limited wasn’t allowed to conduct certain regulated crypto-related activities in the UK without prior consent, the FCA claimed that Binance’s products posed “significant risks” to its investors.

FCA feared that the loan granted Bifinity “specific contractual rights” over Eqonex, which could allow Binance Connect (then Bifinity) to conduct crypto-related activities in the UK via Digivault, a Diginex’s UK subsidiary and custody solution to Eqonex.

During the month this issue was presented, Binance stopped its fiat services in Australia due to issues with a third party. June 2022 saw Binance’s custody license application being rejected by German regulators. However, since July 2022, Binance has become a licensed crypto broker-dealer in Dubai.

Currently, the world’s leading exchange by market capitalization is amidst legal battles against the US Securities and Exchange Commission and Commodity Futures Trading Commission – both of which have alleged that Binance operated on US soil without a license.