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In a recent turn of events, Binance, the prominent crypto exchange, has advised its European users, specifically those using Paysafe, to shift their Euro (EUR) holdings to the USDT stablecoin. This advisory comes before the set October 31 deadline. The exchange clarified that this recommendation follows Paysafe’s sudden move to halt the processing of EUR deposits for its patrons on Binance.
Our current partnership for EUR services is undergoing a change
Notably, Paysafe had already hinted at this by suspending Euro transactions on September 25. Before this move, Binance’s European clientele relied on the firm for managing their fiat deposits and withdrawals.
Binance assures its users that this disruption will only be short-lived. A representative from the exchange stated, “Our current partnership for EUR services is undergoing a change. We expect the transition to span a few days and pledge to offer periodic updates. Our goal is to have the new fiat associate functioning promptly.”
Binance's European banking partner Paysafe to withdraw support https://t.co/1NF83t5OVP pic.twitter.com/RoheC4u7wy
— Reuters (@Reuters) June 29, 2023
Previously, Binance users utilized the SEPA (Single Euro Payments Area) system for bank transactions within the EU. The sudden decision by Paysafe, Binance claims, has led to a temporary halt in these services. They’ve also expressed regret for the inconvenience caused.
From 4 a.m. UTC this past Thursday, EUR spot trading pairs for Paysafe users on Binance have been suspended and any open orders were nullified. Moreover, the ‘Binance Convert’ feature, akin to a token swap platform, is now facing restrictions for Euro dealings. However, users can still transfer their Euros to their personal bank accounts.
Paysafe started the partnership with Binance on Jan 26, 2022, according to their announcement.
It is strange that not even 2 years later, this partnership is coming to an end, but the reason has to do most likely with the regulatory climate in Europe. It is becoming reminiscent of the U.S. strict regulatory climate, where many banks that facilitated crypto transfers have forced to shutdown, after the SEC started to crack down following the FTX and Luna disasters.
Other Countries Affected
Diving deeper into Binance’s recent issues, the exchange’s challenges are not limited to Europe. This week, Binance France confirmed that users couldn’t process Euro transactions via bank transfers. The decision followed previous issues with Paysafe discontinuing support for British pound transactions earlier in May due to regulatory apprehensions in the UK.
Adding to its troubles, Binance attempted and failed to get a virtual asset service provider license in the Netherlands in June. This was quickly followed by Belgium’s directive that accused the exchange of regulatory non-compliance and ordered a temporary halt in operations. Although Binance restarted signing up new Belgian users, other global challenges persist.
For instance, Binance Australia halted Australian dollar bank transactions in June. On September 27, they exited the Russian market, selling to a new entity named CommEX, amidst allegations of not adhering to financial embargoes against Russia.
Additionally, the U.S. continues to be a challenging market for Binance. The SEC has lodged a legal complaint against Binance, accusing it of offering unregistered securities and unauthorized operations. This came after a previous lawsuit by the CFTC that accused the crypto exchange of non-compliance.
Despite this, while Binance faces significant regulatory challenges across different regions, it continues to try to adapt address these issues to maintain its position in the crypto exchange market.
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