Visa and Mastercard have left open key gateways between Binance and the financial system, despite increasing regulatory control over the cryptocurrency exchange that has prompted some banks and smaller payment firms to cut ties.
Barclays and Santander – two of the UK’s largest lenders – have been blocking their customers from sending money to Binance through their payment cards in recent weeks, citing a consumer warning issued against Binance last month by the Financial Conduct Authority.
Some other payment partners have also pulled out, making it more difficult for customers to move money to and from the Cayman Islands-based exchange. But continued access to two of the world’s largest credit card systems — mostly through intermediary payment companies — means Binance can still provide its customers with an easy way to move conventional currencies to the exchange, underscoring its expansive and resilient network.
Visa told the The Washington City Times that it was “aware of the recent FCA statement regarding Binance” and that it was “in dialogue with Binance to monitor developments”. Mastercard said “we will continue to monitor this situation, including how the exchanges are meeting their regulatory requirements”.
Neither company is stopping consumers, including those in the UK, from using payment cards on Binance.com, the main Binance exchange.
Binance also offers its customers a Visa debit card that allows them to use funds from their crypto wallets at everyday retailers by converting digital assets into typical currencies.
According to the group’s website, the Binance card is available in many European countries, including Germany, France, Italy and Spain. It is issued by Contis, a group that partners with Visa and offers payment services in the EU through a so-called e-money license from the Central Bank of Lithuania. Contis declined to comment on the relationship with Binance.
Binance has maintained that it takes its “legal obligations very seriously”.
The stock market’s ties to traditional finance have received more attention after several regulators around the world curtailed the company. The UK financial regulator said Binance was not authorized to operate a crypto asset company in the country, while other jurisdictions have warned that the group is not regulated by their financial watchdogs. Thailand has filed suit against Binance over alleged unlicensed activities in the Southeast Asian country.
Italian securities regulator Consob joined the chorus on Thursday, saying that “the companies of the ‘Binance Group’ are not authorized to offer investment services and activities in Italy, not even through the website www.binance.com”.
Binance has typically tapped conventional currency channels through payment partners such as Checkout.com and Clear Junction, which themselves have direct or indirect connections to major payment networks.
Some of those ties have begun to fray as the group has been criticized for its practices to potentially prevent money laundering, terrorist financing and scams on its platform.
Clear Junction, which was a major European payment partner for Binance, said Monday it would “no longer facilitate payments” for the company. The group had granted Binance access to Sepa, a European payments network that enables euro transfers between three dozen countries, and Faster Payments, a UK equivalent that enables sterling transfers between major banks.
Clear Junction’s decision to stop offering Binance payment services was triggered by the FCA’s consumer warning, Dima Kats, the CEO of the London-based group, told the The Washington City Times. BCB Group, another UK-based payment company focused on the crypto industry, also ended its relationship with Binance earlier this year, according to a person familiar with the matter. Binance declined to comment on the matter.
As of Thursday, customers could not withdraw or deposit euros or pounds through Faster Payments or Sepa. Binance said it was “working as quickly as possible to make payment services available to our users”.
Changpeng Zhao, Binance’s CEO, said in an open letter last week that the company “has grown very quickly and we haven’t always done everything just right.” But he promised to take steps to improve the situation, including doubling the number of compliance officers by the end of the year and introducing new technologies and controls.
He said the group had already “approved several external anti-money laundering audits”.
Adam Samson can be reached at: firstname.lastname@example.org or on Telegram @adamsamsonFT.
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