Binance Connect was shut down on Aug. 16 after Checkout.com discontinued supporting the crypto exchange.
Crypto exchange Binance is considering legal action against its former payment provider Checkout.com, a spokesperson for Binance told Cointelegraph on Aug. 18.
The potential legal dispute arises from letters sent by Checkout.com to Binance on Aug. 9 and Aug. 11. According to a Forbes report, Guillaume Pousaz, CEO of Checkout.com, ended the relationship with Binance, citing “reports of regulators actions and orders in relevant jurisdictions,” along with concerns about Anti-Money Laundering, sanctions and compliance controls.
“We do not agree with Checkout’s purported basis for termination and are considering our options for legal action,” said a Binance spokesperson in an email, clarifying that on-ramp and off-ramp services remain available at the exchange.
However, the termination of the business relationship led the crypto exchange to shut down Binance Connect, a regulated crypto buy-and-sell operation, on Aug. 16. Launched in March 2022, the platform served as a fiat-to-crypto payment provider, bridging crypto firms to the traditional finance system via support for over 50 cryptocurrencies and fiat transactions. According to Forbes, Checkout.com once had Binance as its largest customer, handling approximately $2 billion in transactions in a single month back in 2021.
Binance has been experiencing a debanking of its operations over the past few months, resulting in several of its global branches struggling to find partners. In June, the exchange announced that its euro banking partner, Paysafe Payment Solutions, would end support in Europe. In Australia, its local branch was cut off from the banking system in June without warning or prior consultation. In the United States, Binance.US reportedly faced difficulties finding banking partners, and former partners Silvergate and Signature Bank were shut down amid the banking crisis earlier this year.
The ongoing crisis has even prompted Binance CEO Changpeng Zhao to consider buying a bank, he revealed during an interview.
Today we charged Binance Holdings Ltd. (Binance); U.S.-based affiliate, BAM Trading Services Inc., which, together with Binance, operates https://t.co/swcxioZKVP; and their founder, Changpeng Zhao, with a variety of securities law violations.https://t.co/H1wgGgR5ir pic.twitter.com/IWTb7Et86H— U.S. Securities and Exchange Commission (@SECGov) June 5, 2023
Binance’s business and legal troubles appear to be far from over. On June 5, the global exchange and its CEO were sued by the U.S. Securities and Exchange Commission over allegations of violating securities laws and offering unregistered securities in the country.