By Alexander Grayson
The world’s leading crypto exchange Binance is to stop bank deposit and withdrawals for its UK customers. This is because the exchange has lost its banking partner in the country due to regulatory crackdown by the UK government.
The banking partner Paysafe has stopped processing Binance transactions because of strict monitoring by regulators. Consequently, the exchange won’t be able to process British pound (GBP) on- and off-ramps. This means UK customers will no longer be able to deposit or withdraw via bank transfer.
While GBP deposits and withdrawals for new users have been suspended since 13 March, bank transfers for the existing customers will end on 22 May, giving ample time for all to withdraw their funds.
Regulatory Pressure Spills to UK
The U.S crypto space has experienced significant turbulence in the last few days as three major crypto-related banks closed down. While Silvergate closed down because it was affected by FTX collapse, Silicon Valley and Signature bank were closed by regulators due to “insolvency” and “risk to consumers” respectively.
It looks like the regulatory pressure has spilled to the UK, resulting in the closure of Paysafe. In a similar development, Okcoin has halted USD deposits in the U.S as it relied on Signature Bank to process all USD deposit and trades.
Paysafe in a statement said the regulatory environment in the UK was “too challenging” at the moment to continue offering the services, adding that the decision was taken with “an abundance of caution.” It’s services are however still available for users outside the UK.
A small fraction of Binance Users Affected
Only a small number of Binance users will be affected by the new development. According to a Binance spokesperson, less than one percent of all Binance users will lose the service. Nonetheless, the exchange is looking for another banking partner to replace Paysafe so that the service can be restored.
So far, many exchanges and other crypto startups have felt the heat from the closing down of banks by regulators in the U.S and now payment processing is halted in the UK due to fear of regulators. This is probably not the end and more of the ripple effects may still be underway.
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