Regulations becoming increasingly stringent? Following the US dollar, Binance rumored to temporarily suspend deposits and withdrawals in British pounds

The world's largest cryptocurrency exchange, Binance, announced in early February that it was temporarily suspending USD bank transfers due to its partner, Signature Bank. Over a month has passed since then, and although Signature Bank has been taken over, Binance appears to have not yet found a solution. It has now been reported that another partner, Paysafe, has decided to stop providing its digital wallet solution to Binance customers in the UK due to regulatory issues. As a result, Binance will suspend new user GBP deposits and withdrawals starting from March 13 and will halt all GBP deposits and withdrawals for all users from May 22.

Who is Paysafe

Paysafe is a multinational online payment company headquartered in the UK, holding regulatory licenses in various countries. After being acquired by Blackstone Group and CVC Capital Partners in 2017, it went public on the New York Stock Exchange under the ticker symbol PSFE.

In January 2022, Binance announced a partnership with Paysafe to enable Single Euro Payments Area (SEPA) bank transfers for customers, allowing Euro transfers among 36 member countries. Binance stated that Paysafe developed a platform using their digital wallet technology and payment processing capabilities to support Binance's fiat-to-crypto services for European users.

Following the USD, Binance Suspends GBP Deposits and Withdrawals

According to The Block, due to the challenging regulatory environment in the UK related to cryptocurrencies, Paysafe decided to cease providing its digital wallet solutions to Binance customers in the UK. As a result, Binance will suspend new user GBP deposits and withdrawals from March 13 and halt all GBP deposits and withdrawals for all users from May 22.

Binance estimates that less than 1% of users will be affected but is "working hard to find alternative solutions for them."

In early February, Binance suspended USD bank transfers as its partner, Signature Bank, no longer supported transactions below $100,000 for exchange customers, preventing customers from transferring USD to Binance via the SWIFT system. Founder CZ explained that although this service represented a small percentage, it was a terrible customer experience, and the Binance team was working to find the fastest solution. Over a month later, although Signature Bank has been taken over, Binance seems to have not yet found a solution. In an increasingly stringent regulatory environment, it appears that the situation for cryptocurrency exchanges is becoming more challenging. While fiat currency transactions are just a bridge to enter and exit the crypto world, they indeed pose significant obstacles for newcomers.