Binance Shuts Down Payment Service
• Binance has shut down its crypto payment service, sparking significant scrutiny from the crypto community.
• The decision is thought to be linked to Binance’s troubles securing and maintaining banking partners following lawsuits from the U.S. CFTC and SEC.
• Despite assurances from Binance, many remain skeptical of the move and see it as indicative of a larger problem with their banking relationships.
Background on Binance
Binance is the world’s largest exchange and is constantly under scrutiny for its decisions. On August 15th, they confirmed that their fiat-to-crypto payment service ‘Binance Connect’ would be shut down, spinning it as a strategic effort to focus on core products. This news was first revealed by Biswap, a decentralized exchange on Binance’s BNB chain that asserted that the firm was closing the service due to a key partner ceasing card support.
Criticism from Crypto Community
The closure of this payment service has been met with criticism from many within the crypto space who are not convinced by Binance’s explanation for shutting down this service. Adam Cochran took a jab at CEO Changpeng “CZ” Zhao when he wrote: „Inb4 CZ says ‚4 this is just because we are so successful and so profitable that we need to do less to do more!“ Napgenus ursus implied that this decision was due to mounting banking troubles rather than any strategic reasons given by Binance themselves.
Significance of Banking Troubles
Banking trouble has caused major issues for Binace in recent months, particularly in June when regulatory walls closed in on them causing their U.S affiliate to lose their primary provider of fiat rails and switch instead to a crypto-only model. Similarly, in Australia they were forced to cancel their derivatives license amid an ASIC review resulting in more difficulties with banking relationships in both countries.
Overall, while Biance may have spun this decision as part of an effort for core products there remains skepticism about whether or not this is truly why they decided to close down their payment service or whether it was motivated by larger banking issues currently plaguing them.