Visa Cryptocurrency Partners

Visa and Mastercard stick with Binance as regulatory scrutiny rises

Visa and Mastercard stick with Binance as regulatory scrutiny rises
Written by publishing team

Visa and Mastercard have left key gates open between Binance and the financial system despite increased regulatory scrutiny on cryptocurrency exchanges that has prompted some banks and smaller payments companies to cut ties.

Barclays and Santander – two of the UK’s largest lenders – have in recent weeks been blocking their customers from sending money to Binance through their payment cards, citing a consumer alert issued last month by the Financial Conduct Authority against Binance.

Some other payment partners have also pulled back, making it difficult for customers to move funds to and from the Cayman Islands incorporated exchange. But continued access to two of the world’s largest credit card systems – usually through intermediary payment companies – means Binance can still provide its customers with an easy way to transfer traditional currencies to the exchange, underlining its sprawling and resilient network.

Visa told the Financial Times that it is “aware of the latest FCA statement on Binance” and that it is in a “dialogue with Binance to monitor developments.” “We continue to monitor this situation, including how the exchanges meet their regulatory requirements,” Mastercard said.

Neither company has banned consumers, including those in the UK, from using payment cards on Binance.com, Binance’s main platform.

Binance also offers a Visa debit card to its customers that allows them to use funds from their crypto wallets at regular retailers by converting digital assets into fiat currencies.

The Binance Card is available in several European countries including Germany, France, Italy and Spain, according to the group’s website. It is issued by Kontis, a partner group Visa and provides payment services in the European Union through the so-called electronic money license from the Central Bank of Lithuania. Konitz declined to comment on his relationship with Binance.

Binance confirmed that it takes its “legal obligations very seriously.”

Stock exchange links to traditional finance have received increased attention after several regulators around the world imposed restrictions on the company. The UK financial regulator has said that Binance is not authorized to operate the crypto-asset business in the country, while other jurisdictions have warned that the group is not regulated by its own financial regulators. Thailand has filed a criminal complaint against Binance for allegedly operating in the Southeast Asian country without a license.

Consob, the Italian securities regulator, joined the chorus on Thursday, saying that “Binance Group companies are not authorized to provide investment services and activities in Italy, not even through the website www.binance.com.”

Binance typically uses traditional crypto channels through payment partners such as Checkout.com and Clear Junction, which have direct or indirect connections to major payments networks.

Some of those relationships began to erode as the group faced criticism over its practices to prevent potential money laundering, terrorist financing and fraud on its platform.

Clear Junction, which has been an important European payments partner for Binance, said Monday that it will “no longer facilitate payments” for the company. The group had provided Binance with access to Sepa, a European payments network that allows transfers in euros between thirty countries, and Faster Payments, a UK equivalent that facilitates transfers in pounds sterling between major banks.

Binance Card with Visa Brand

The Visa-branded Binance card is available in several European countries including Germany, France, Italy and Spain, according to the group’s website.

London-based group CEO Dima Katz told the Financial Times that Clear Junction’s decision to stop offering Binance payments services came due to a consumer warning issued by the FCA. BCB Group, another UK-based payments company focused on the crypto industry, terminated 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 were unable to withdraw or deposit euros or pounds sterling through Faster Payments or Sepa. Binance said it is “working as quickly as possible to make payment services available to our users.”

Changpeng Zhao, CEO of Binance, said in an open letter last week that the company “has grown too fast and we didn’t always get everything exactly right.” But he pledged measures to improve the situation, including doubling the number of compliance staff by the end of the year and deploying new technologies and controls.

He said the group had “already authorized several external anti-money laundering audits”.

Adam Samson can be reached at adam.samson@ft.com or on TelegramadamsamsonFT.

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