Crypto exchange Binance to halt sterling transfers (updated)

Paysafe

14/03/2023 10:53

(Adds context on Binance regulatory issues)
    By Elizabeth Howcroft and Tom Wilson
       LONDON, March 14 (Reuters) - Binance is halting its
sterling deposits and withdrawals, a company spokesperson said
on Tuesday, a month after the world's largest crypto exchange
ceased dollar transfers.
    Binance has been informed by its partner for sterling
transfers, Paysafe, that it would halt its services from May 22,
the spokesperson said, impacting all Binance customers. 
    Sterling transfers for new users were stopped on Monday, it
said.  
    "Binance will ensure that affected users are still able to
access their GBP balances," the spokesperson said, adding that
the change "affects less than 1% of Binance users."  
    Binance, which has more than 128 million customers, did not
give details on the number of clients the move would impact. The
company is working to find an "alternative solution" for
sterling transfers, the spokesperson said. 
    The cessation of sterling transfers, first reported by
crypto news outlet The Block, is the latest obstacle for Binance
in accessing traditional currencies. Binance last month
suspended all dollar bank transfers amid a growing crackdown on
crypto by U.S. authorities.    
    The Justice Department is also investigating Binance, run by
billionaire CEO Changpeng Zhao, for suspected money laundering
and sanctions violations, Reuters has previously reported. A top
Binance executive told The Wall Street Journal and Bloomberg
last month that Binance expected to pay penalties to resolve
U.S. investigations into the company.
    A further hindrance for Binance in accessing dollars came
after the U.S. Securities and Exchange Commission told the
company which issued its "BUSD" stablecoin it was considering
taking action against it. The move sparked around $6 billion in
outflows as of earlier this month. 
    The importance of sterling funding to Binance is unclear.
The company does not make public its finances, with the core of
the business – the giant Binance.com exchange - mostly hidden
from public view.    
    Paysafe did not immediately respond to a request for comment
from Reuters. The company offers the service via UK payments
network Faster Payments, which also had no immediate comment. 
    A spokesperson for Skrill, the Paysafe unit that works with
Binance, told crypto website Decrypt that "the UK regulatory
environment in relation to crypto is too challenging to offer
this service at this time and so this is a prudent decision on
our part taken in an abundance of caution."
    Britain's financial watchdog said last year that it lacked
powers to stop Binance from accessing the Faster Payments
network via Paysafe. 
    The UK's Financial Conduct Authority (FCA) warned consumers
in June 2021 that Binance did not hold "any form" of permission
to offer services regulated by Britain. 
    The FCA did not immediately respond to a request for
comment. 

 (Reporting by Tom Wilson and Elizabeth Howcroft; editing by
Jason Neely)
 ((T.Wilson@thomsonreuters.com; Twitter: @tomwilson1983; Reuters
Messaging: t.wilson.thomsonreuters.com@reuters.net))