Crypto exchange Binance is currently considering taking legal action against its former payment provider, Checkout.com. In the latest development of their business relationship, Checkout.com terminated their partnership with Binance citing concerns related to Anti-Money Laundering (AML), sanctions, and compliance controls, along with reports of regulatory actions and orders in relevant jurisdictions. However, Binance disputes this decision and is exploring its options for legal action.
Despite the termination of its partnership with Checkout.com, Binance clarified that its on-ramp and off-ramp services remain available at the exchange. However, this development did lead to the closure of Binance Connect, a regulated crypto buy-and-sell operation that served as a fiat-to-crypto payment provider. Launched in March 2022, Binance Connect facilitated transactions for over 50 cryptocurrencies and fiat transactions. Furthermore, Forbes reported that Checkout.com once had Binance as its largest customer, handling an impressive $2 billion in transactions in a single month in 2021.
This recent termination of business ties is just one of the challenges that Binance has faced in recent months. The crypto exchange has experienced a debanking of its operations, which has resulted in various branches struggling to find partners in different regions. For instance, Binance’s euro banking partner, Paysafe Payment Solutions, announced in June that it would end support for Binance in Europe. Similarly, Binance’s Australian branch faced being cut off from the banking system in June without any prior warning or consultation. Additionally, Binance.US reportedly encountered difficulties finding banking partners in the United States, and former partners Silvergate and Signature Bank were forced to shut down amid the banking crisis earlier this year.
The ongoing debanking crisis has even prompted Binance CEO Changpeng Zhao to consider the possibility of purchasing a bank. In an interview, he expressed his openness to the idea, illustrating the extent to which Binance is willing to explore alternative strategies to address its banking challenges.
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Interestingly, Binance’s business and legal troubles do not end with the debanking crisis. On June 5, Binance and its CEO were sued by the U.S. Securities and Exchange Commission (SEC) for allegedly violating securities laws and offering unregistered securities in the United States. This legal action poses significant hurdles for Binance’s global ambitions and adds to the company’s existing challenges.
The latest development involving Checkout.com’s termination of its partnership with Binance raises questions about the future of the crypto exchange and its ability to navigate the regulatory landscape. While Binance has been a prominent player in the cryptocurrency industry, these recent setbacks suggest that the company may need to reassess its strategies and partnerships to regain stability and compliance with regulatory requirements.
As Binance weighs its options for legal action against Checkout.com, the outcome of this potential dispute could have far-reaching implications for both parties. It remains to be seen how this situation will unfold and whether Binance will be able to find a resolution that addresses its concerns and allows it to regain its footing in the cryptocurrency market.
In conclusion, Binance’s consideration of legal action against its former payment provider, Checkout.com, highlights the challenges and obstacles the crypto exchange has faced in recent months. From debanking issues to regulatory lawsuits, Binance is navigating a complex landscape. The outcome of this potential legal dispute will shape the future trajectory of both Binance and Checkout.com, and the cryptocurrency industry as a whole.
