London-based credit card processing company, Checkout.com, has severed ties with crypto giant Binance, citing concerns over Anti-Money Laundering (AML) regulations and compliance issues. The termination, effective August 17th, raises questions about the future of the exchange’s payment processing capabilities.
According to a recent report, Checkout.com processed between $300 million and $400 million of Binance transactions in recent months, solidifying itself as a major player in the crypto financial ecosystem. However, the relationship ended abruptly after Checkout CEO Guillaume Pousaz sent a series of letters to the exchange detailing the reasons behind the decision.
Pousaz expressed concerns in letters dated August 9th and 11th. These letters addressed “reports of regulators’ actions and orders in relevant jurisdictions” as well as “inquiries from partners.” In the second letter, sent on August 11th, specific attention was given to issues related to the exchange’s anti-money laundering measures, sanctions enforcement, and overall compliance controls. As per the report, Lewis Jones, spokesperson for Checkout, confirmed the termination.
Binance Disagrees, Contemplates Legal Action
Binance disagreed with Checkout’s decision to end their partnership and hinted at possible legal action. According to the exchange spokesperson Dewi Mustajab, the company devoted substantial resources to establishing a strong compliance program to build trust with regulators and partners. Mustajab also stated that despite Checkout’s termination, it wouldn’t significantly impact Binance’s services.
The termination coincides with the exchange’s recent decision to close down its crypto trading arm for businesses called Binance Connect. It is interesting to note that Checkout played a significant role in supporting this service. Despite downplaying the impact of Binance Connect’s closure, these sequential events marked a challenging period for the cryptocurrency exchange.
The split between Checkout.com and Binance is a significant setback for both entities. The exchange had played a pivotal role in propelling Checkout.com to the forefront of Europe’s financial landscape. This collaboration notably contributed to Checkout’s massive $1 billion funding round last year, valuing the company at $40 billion.
Nevertheless, Checkout.com’s recent decision signifies a pivotal moment in its crypto journey. It reflects an evaluation of its reliance on the cryptocurrency industry amidst growing regulatory scrutiny and the decline of other significant crypto clients. This unforeseen separation could have implications for Binance’s payment processing capabilities, highlighting the broader tension between cryptocurrency businesses and evolving regulatory landscapes.
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