Tough luck, Brits: Binance suspends UK deposits and withdrawals
Perfect timing – we could use another bank run
The world's largest cryptocurrency exchange has just become a bit smaller 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 payment processor Paysafe, which said it was terminating its embedded wallet solution for customers, and working with Binance to terminate the pair's UK agreement in an "orderly and fair process."
"We have concluded that the UK regulatory environment in relation to crypto is too challenging to offer this service at this time and so this is a prudent decision on our part taken in an abundance of caution," Paysafe told us in an emailed statement.
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. Both Paysafe and Binance said the portion of customers using Paysafe to perform fiat deposits and withdrawals in the UK is "small" – Binance specified it's less than one percent of users.
"We know that 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," a Binance spokesperson told us.
Paysafe and Binance both noted that other forms of deposits for UK customers are – and will remain – available.
A tangled web of subsidiaries
This isn't the first time Binance has been in trouble with governments, nor the first time it's been banned from taking deposits in local currencies.
In February, Binance suspended bank transfers in US dollars. It didn't provide a reason for the move, but it could be due to US regulators' long-running investigation into the enterprise. The Department of Justice has been investigating Binance since 2021 on charges of money laundering and sanctions violations. As in the more recent suspension of withdrawals and deposits in GBP, Binance said few of its users made use of USD transfers.
Binance.us has continued to offer USD transfers and is legally able to do so because the pair are separate companies. Binance.us was founded in 2019 when regulators kicked Binance.com out of the US.
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The separate nature of Binance and Binance.us has been a hot topic for US regulators, and recently revealed messages between Binance leadership reveal the subsidiary may not be entirely independent.
The UK's own Binance subsidiary never even got off the ground. The UK's Financial Conduct Authority banned Binance Markets Limited from doing 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 doing business in the UK since its local arm was shut. Governments in Japan, Germany, Thailand, Canada and elsewhere have also investigated and/or cracked down on Binance's operations within their borders.
As of December, US DoJ prosecutors were reportedly split on whether to charge Binance, but last month Binance's Chief Strategy Officer Patrick Hillmann told the Wall Street Journal that Binance was expecting penalties and fines to come out of the investigation. The DoJ's digging will likely end in "a fine, could be more … We just don't know. That is for regulators to decide," Hillmann told the WSJ.
Because nothing screams "trustworthy" like that sort of acquiescence to accusations of financial crime. ®