The world’s largest cryptocurrency exchange just got a little short as Binance will suspend deposits and withdrawals in pounds for customers in the United Kingdom.
The move comes as a response to a decision by its UK payments processor Paysafe, which said it was terminating its embedded wallet solution for customers, and the pair’s UK settlement in a “systematic and fair process”. Working with Binance to conclude.
Paysafe said in an emailed statement to us, “We have concluded that the UK regulatory environment with respect to crypto is too challenging to offer this service at this time and it is therefore a prudent decision on our part.”
Binance halted deposits and withdrawals for new customers in the UK on Monday, the company told us by email, and all customers will be unable to deposit or withdraw their crypto in pounds from May 22. Paysafe and Binance both said the share of customers using Paysafe to make fiat deposits and withdrawals in the UK is “small” – Binance specified it is less than one percent of users.
A Binance spokesperson told us, “We know these services are valued by our users and our team is working hard to find an alternative solution for them. We will share updates on this as and when we are able. ”
Both Paysafe and Binance noted that other forms of deposits are – and will remain – available for UK customers.
a tangled web of subsidiaries
This is not the first time Binance has run into trouble with governments, nor the first time it has been banned from taking deposits in local currencies.
In February, Binance suspended bank transfers in US dollars. It didn’t give a reason for the move, but it could be due to US regulators’ long-running investigation into the venture. The Justice Department has been investigating Binance since 2021 on charges of money laundering and sanctions violations. As for the recent suspension of withdrawals and deposits in GBP, Binance said some of its users used USD transfers.
Binance.us continues to offer USD transfers and is legally able to do so as the pair are separate companies. Binance.us was founded in 2019 after regulators pulled Binance.com out of the US.
The separate nature of Binance and Binance.us has been a hot topic with U.S. regulators, and recent messages emerging among Binance leadership suggest that the subsidiary may not be completely independent.
The UK’s own Binance subsidiary never got off the ground. The UK’s Financial Conduct Authority banned Binance Markets Limited from carrying out any regulated activity in the UK without the prior consent of the FCA.
Binance.com, which is unavailable in the US, is the entity through which Binance has been conducting business since the closure of its local branch in the UK. The governments of Japan, Germany, Thailand, Canada and elsewhere have also investigated and/or taken action on Binance’s operations within their borders.
As of December, US DoJ prosecutors were reportedly split on whether to charge Binance, but last month Patrick Hillman, chief strategy officer at Binance, told wall street journal That Binance was hoping to come out of the investigation with penalties and fines. The DoJ’s dig would likely be “a fine, could be more … We just don’t know. That’s for the regulators to decide,” Hillman told WSJ,
Because nothing screams “trustworthy” like familiarity with financial crime allegations.