Payment processor Checkout.com terminates partnership with Binance over concerns regarding anti-money laundering compliance issues.

According to a report by Forbes, London-based payment processor Checkout.com has terminated its partnership with cryptocurrency giant Binance. The concerns cited include anti-money laundering, sanctions, and compliance controls at Binance.

Concerns Over Binance's Anti-Money Laundering, Sanctions, and Compliance Controls Expressed by Checkout

Checkout spokesperson Lewis Jones confirmed to Forbes that the company has terminated its contract with Binance due to "reports on actions and orders by regulatory authorities in the jurisdiction" and "inquiries from partners." Checkout also expressed more concerns regarding Binance's anti-money laundering, sanctions, and compliance controls, stating that the contract was terminated on August 17th.

Binance's regulated cryptocurrency trading division, Binance Connect, ceased operations on August 16th. This service, formerly known as Bifinity, acted as a payment provider facilitating fiat-to-cryptocurrency transactions, connecting cryptocurrency companies with traditional financial systems. The platform initially supported 50 cryptocurrencies, as well as legal payment methods such as Visa and Mastercard. According to Forbes, the service's collaborating partner was Checkout.

Reports indicate that Binance was the largest client of Checkout, playing a significant role in the payment company's growth. The business with Binance had previously led to a surge in revenue for Checkout, processing up to $2 billion in Binance transactions in a single month in 2021. Prior to securing a massive $1 billion funding round last year, this type of business had propelled the payment company's valuation to $40 billion, making its founder and CEO Guillaume Pousaz one of the wealthiest individuals in Europe.

In a tweet in 2021, Guillaume Pousaz mentioned that within a decade, 95% of transactions would involve cryptocurrencies, with participants at the time including Binance founder CZ and FTX founder SBF, who is currently detained.

95% of all transactions are going to be crypto in 10 years! @cz_binance

Thanks @cz_binance @SBF_Alameda and @cuysheffield for joining us for a great panel! pic.twitter.com/RNglXSHRUC

— Guillaume Pousaz (@GuillaumePousaz) May 20, 2021

However, Checkout spokesperson Jones now states that digital asset clients "account for only single-digit percentages of our group's total processing volume."

Binance Disagrees with Unilateral Contract Termination, Services Unaffected

Binance, on the other hand, disagrees with the basis of Checkout's contract termination and is considering legal action. Binance spokesperson Dewi Mustajab stated:

We have made significant progress in establishing an industry-leading compliance program, and we aim to build more trust with regulatory authorities and partners. Checkout's departure will not affect our services.

Despite this, Binance's journey in Europe seems to face obstacles, as the exchange has encountered regulatory challenges in the Netherlands, the UK, France, Belgium, and Austria, and voluntarily withdrew its license application in Germany in June. In July, during its sixth-anniversary celebration, Binance experienced executive departures, massive layoffs of thousands of employees, and cuts in employee benefits. It appears that Binance's compliance path is indeed fraught with difficulties!