Payment processing giant Checkout.com has taken the decision to terminate its partnership with Binance, one of the world’s largest cryptocurrency exchanges. This move comes as concerns surrounding money laundering and compliance have cast a shadow on Binance’s operations and prompted various industry players to reevaluate their associations.
Key Takeaways
- London-based credit card payment processor Checkout.com has ended its partnership with Binance, the world’s largest cryptocurrency exchange, as confirmed by a spokesperson.
- The termination, communicated through two letters sent in the current month, was first reported by Forbes and later verified by TechCrunch.
- Checkout.com, which had a valuation of $40 billion in January 2022, cited concerns arising from “reports of regulators actions and orders in relevant jurisdictions” and “inquiries from partners” as the rationale behind the termination.
- Additionally, the letters also emphasized apprehensions regarding Binance’s alleged issues with anti-money laundering protocols, sanctions adherence, and compliance controls.
- In response to this termination, Binance expressed disagreement with Checkout.com’s assertions and is exploring the possibility of legal action, according to a spokesperson’s statement.
- However, despite the challenges, Binance reaffirms its dedication to collaborating with global regulators and partners moving forward.
Binance Faces AML Concerns Leading to Partnership Termination by Checkout.com
Credit card payment processor Checkout.com has severed ties with Binance, the world’s largest cryptocurrency exchange, as revealed by two letters dated August 9 and 11. The CEO of Checkout.com, Guillaume Pousaz, cited issues related to Binance’s anti-money laundering protocols, sanctions adherence, and compliance controls as the key reasons for discontinuing their service.
In addition, the letters indicated a contract termination date of August 17, 2023, and expressed concerns over regulatory challenges in multiple jurisdictions. Binance, in response, is reportedly considering legal action against Checkout.com over the grounds of contract termination.
This move comes as Binance aims to cautiously navigate the legal landscapes of various jurisdictions while striving to expand the crypto market’s reach to new audiences. Further, the termination has temporarily resulted in the loss of transactions worth approximately $400 million, based on recent data.
Mounting Concerns Over Money Laundering and Compliance By Binance
The decision to sever ties with Binance underscores the growing apprehension within the financial sector about the exchange’s adherence to anti-money laundering (AML) and know-your-customer (KYC) regulations.
Further, regulatory bodies worldwide have been closely scrutinizing cryptocurrency exchanges, and Binance has not been exempt from this heightened oversight.
Several reports have surfaced, raising questions about Binance’s AML and KYC practices. As a result, Checkout.com, a prominent player in the payment processing realm, has opted to distance itself from the exchange.
Further, this move highlights the growing emphasis on compliance within the cryptocurrency ecosystem, with stakeholders like Checkout.com prioritizing transparency and regulatory alignment.
Impact on the Cryptocurrency Landscape
The decision by Checkout.com to sever its relationship with Binance could potentially have broader implications for the cryptocurrency industry. Moreover, it signifies that established financial entities are becoming more cautious about their partnerships within the crypto space, especially in light of mounting regulatory pressures.
Furthermore, the move also raises the bar for other cryptocurrency exchanges to enhance their compliance mechanisms., and ensure that they meet the stringent AML and KYC standards set by regulators. Lastly, with the crypto landscape evolving rapidly, exchanges that fail to prioritize compliance could face increasing difficulties in establishing and maintaining partnerships with established financial institutions.
Read More:
Japanese Exchange Zaif Expands Trading Options with KLAY/JPY and KLAY/BTC Trading Pairs
Bitso, Leading Mexican Cryptocurrency Exchange, Introduces International payment Solution