Binance’s Problems Continue, but the Company Isn’t Giving Up

Binance is the largest and most popular cryptocurrency exchange in the world. Its place atop the CoinMarketCap ranks isn’t up for debate or under any immediate threat.

Binance’s Problems Continue, but the Company Isn’t Giving Up

Being one of the most recognizable companies in an industry that is still facing scrutiny, Binance is in a bit of a sticky situation. The company is constantly the topic of discussion, and it definitely doesn’t help that its activities haven’t been primarily clear either.

However, this year has been quite the challenging one for the world’s biggest exchange. Binance has been hit with multiple investigations time and again, and the company is now facing the threat of losing customers by cutting down on several services.

British Regulators Sound Off

The current spate of problems began early in June when British authorities and financial institutions seemed to be targeting Binance. That month, the Financial Conduct Authority (FCA) issued a warning to the public, saying that Binance Markets Limited would no longer be permitted to engage in any “regulated activity” in the country.

As the FCA explained, Binance has been allowed to offer derivatives and other financial assets but denominated in crypto. That will no longer be allowed to happen, as the FCA told investors to be careful of online adverts promising them high returns on investments in cryptocurrencies and crypto-related products.

Binance responded, saying that the mandate didn’t prevent it from conducting business in the country. The company pointed out that Binance Markets Limited is a separate entity. Still, several high-profile institutions immediately started to distance themselves from the company.

First was Barclays Bank, which said it would stop all card payments made to Binance until further notice. The U.K. arm of Spanish bank Santander followed suit, announcing that it would also cut payment channels to Binance. Sterling Bank, another major bank in the country, took the same steps.

With several of its banking channels cut, Binance had no choice but to suspend fiat currency withdrawals for its U.K. customers. Financial News reported early last month that the exchange had taken the decision, although it didn’t say why it was taking such a step.

Binance had taken a similar route in June, suspending cash payouts via Faster Payouts following the FCA’s warning. While it reinstated the service, this new suspension meant that its customers would almost be left hanging.

Other Problems Creeping In

Before Binance was able to recover from the British onslaught, Italian authorities moved in. According to a statement, the Italian Companies and Exchange Commission (CONSOB) explained that Binance Group and all of its affiliated companies aren’t authorized to provide investment services or even operate in the country.

The regulator went on to warn about the implications of Binance’s legal status in Italy, advising people to take precautions when investing.

“In any case, it is important that investors are informed that transactions in instruments related to crypto assets may pose risks that are not immediately perceptible due to their complexity, high volatility, as well as for security vulnerabilities,” CONSOB said.

All of these investigations and challenges have undoubtedly taken a toll on Binance, with the company having to delist margin trading pairs denominated in the Pound, Dollar, and Australian Dollar. It appears that authorities are bent on putting the company in a tight spot, considering that cryptocurrencies remain largely unregulated worldwide.

The Securities Commission of Malaysia has also issued a statement ordering Binance and its affiliates to cease operating in the country immediately. The ban is expected to take effect from August 14. Binance had actually been banned since July 2020, but the exchange continued to operate. The statement explained that the company should take down its mobile app and websites in the country and stop all media and ad campaigns nationwide.

Binance Stays the Course

It’s easy to see how these problems can cause Binance to have breakdowns. But, the company has remained resolute in its approach to leadership. Binance is focusing on the good things still happening in the industry, especially since it looks to be a part of them.

With the industry currently feeling IPO fever, Binance hasn’t shied away from the possibility of a public offering. At a conference, company chief executive Changpeng Zhao said that an IPO is in the cards for its American subsidiary, Binance US.

“Binance US is looking at the IPO route. Most regulators are familiar with a certain pattern, or having headquarters, having corporate structure. But we are setting up those structures to make it easier for an IPO to happen.”

Zhao added that while Binance hasn’t done a good job of cooperating with regulators, they still believe that there is a lot they can do to improve.

Besides the IPO move, Binance has also struck a deal to bring crypto payments to e-commerce giant Shopify. This week, the company announced that it had partnered with crypto-to-fiat hybrid payment service Alchemy Pay to enable crypto payments for over 2 million global merchants through its Binance Pay service.

The new integration will allow merchants to accept and make payments using 40 supported assets in 18 countries. Binance Pay users will be able to pay through Alchemy Pay’s partners, including Shopify and much more.

Binance obviously isn’t going anywhere. Despite the company’s many issues, it remains resolute in its mission to dominate the crypto space across the board - whatever it takes.

0 Comments • Tap In (Sign in) to comment

  • No comments yet