Traditional Card Networks Distance from Binance
Embattled cryptocurrency exchange Binance faces a setback as payment card giants Mastercard and Visa discontinue certain services, reflecting the financial industry’s growing caution amid regulatory scrutiny and broader compliance concerns in the crypto sector.
Mastercard’s Card Pullback
Mastercard has decided to cease offering Binance-branded cards in Latin America and the Middle East. These cards enable users to make purchases with cryptocurrencies. Binance announced this development via its official channel on X, formerly known as Twitter.
Similar to standard debit cards funded with crypto assets, the cards have been used by a fraction of Binance’s users, impacting less than 1% of users in the affected markets. Users of these cards have until September 21, 2023, to utilize them before they are no longer available.
However, Binance emphasized that this change does not affect its global accounts, and users can still shop and send cryptocurrencies through Binance Pay, a secure and borderless cryptocurrency payment technology.
Mastercard’s Confirmation
Mastercard confirmed the termination of its partnership with Binance, specifying that from September 22, four pilot co-branded Mastercard card programs in Argentina, Brazil, Colombia, and Bahrain will cease operations.
Cardholders have a transition period to convert their Binance wallet holdings. Significantly, this action does not impact other crypto card programs Mastercard offers.
Visa’s Disassociation
Visa has also distanced itself from Binance, discontinuing its issuance of new co-branded cards with the company in Europe since July. A spokesperson for Visa provided this information to Bloomberg.
Both Binance and Visa were not immediately available for comment when contacted by CNBC.
Cryptocurrency’s Mixed Reception in Finance
These actions by Mastercard and Visa underscore the mixed reception cryptocurrencies continue to receive from the traditional financial services industry.
While Mastercard had shown growing interest in cryptocurrencies, allowing banks and merchants to offer crypto services and launching products related to crypto risk assessment, Visa has similarly distanced itself from Binance in Europe.
Mastercard noted that its decision to end the partnership with Binance does not affect its broader commitment to supporting and securing digital assets.
Regulatory Scrutiny and Challenges for Binance
Binance is currently facing intense regulatory backlash from authorities such as the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The SEC has filed 13 charges against Binance and its CEO, Changpeng Zhao, accusing the company of mingling customer funds with its own, similar to allegations against the now-defunct crypto exchange FTX.
Binance has denied these allegations and recently filed a protective order against the SEC, citing the regulator’s overly broad and burdensome requests for information.
Last week, Checkout.com reportedly terminated its relationship with Binance, citing concerns over regulatory actions, partner inquiries, and issues related to anti-money laundering, sanctions, and compliance controls.
Read the original article on CNBC.
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