Binance, one of the world’s largest cryptocurrency exchanges, is facing a major setback as Paysafe, a leading provider of online payment solutions, announced that it will stop processing payments for Binance customers in the UK and Europe. Paysafe, which owns popular payment platforms such as Skrill, Neteller and Rapid Transfer, said in a statement that it has decided to suspend its services for Binance “in light of the recent regulatory developments regarding Binance in a number of countries”. The statement added that Paysafe will continue to monitor the situation and “will update our customers accordingly”.
This is a significant blow for Binance, which has been under increasing scrutiny from regulators around the world over its compliance and consumer protection practices. In June, the UK’s Financial Conduct Authority (FCA) issued a consumer warning against Binance, saying that the exchange is not authorized to conduct any regulated activity in the country. The FCA also ordered Binance to remove all advertising and financial promotions by June 30.
Other countries, such as Japan, Canada, Thailand and Italy, have also issued similar warnings or notices against Binance, citing concerns over its lack of registration or authorization. Binance has said that it is committed to working with regulators and complying with local laws, but it has also faced challenges in finding a stable legal jurisdiction to operate from.
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The loss of Paysafe as a payment partner could have a significant impact on Binance’s business, as many of its customers rely on its platforms to deposit and withdraw funds from their accounts. According to a report by CryptoCompare, Binance accounted for 65% of the total spot trading volume in the crypto market in June, with over $668 billion worth of transactions. Binance has not yet commented on Paysafe’s decision, but it has previously said that it is working on alternative payment options for its customers. However, it remains to be seen how Binance will cope with the mounting regulatory pressure and the potential loss of trust from its users.
In an interesting legislation, the United Kingdom has taken a major step towards embracing the digital economy by passing a bill that recognizes Bitcoin and other cryptocurrencies as regulated financial activities in the country. The bill, which was approved by the House of Commons on Tuesday, aims to provide legal clarity and consumer protection for the growing sector of crypto assets and services.
The bill defines crypto assets as “digital representations of value that are secured by cryptography and can be transferred, stored or traded electronically”. It also establishes a framework for the registration and supervision of crypto service providers, such as exchanges, wallets and custodians. The bill requires these providers to comply with anti-money laundering and counter-terrorism financing rules, as well as to implement safeguards to protect customers’ funds and data.
The bill also recognizes the potential of blockchain technology, which underpins many crypto assets, to improve efficiency and transparency in various sectors of the economy. It encourages innovation and collaboration between public and private entities to explore the benefits and challenges of this emerging technology.
The bill is seen as a positive development for the UK’s crypto industry, which has been calling for more regulatory certainty and support from the government. The bill aligns the UK with other jurisdictions that have adopted similar legislation, such as Japan, Singapore and Switzerland. It also positions the UK as a leader in the global crypto space, which is expected to grow exponentially in the coming years.
The bill will now move to the House of Lords for further scrutiny and debate, before becoming law. The bill is expected to come into force by early 2024, giving time for the regulators and the industry to prepare for the new regime. The bill is a milestone for the UK’s digital transformation and a testament to its commitment to foster innovation and competitiveness in the financial sector.
