Binance Connect, the regulated buy-and-sell crypto arm of the Binance exchange, will shut down on Aug. 16, according to confirmation received by Cointelegraph in an email from a Binance spokesperson. This decision was communicated by BNB Chain-based decentralized exchange Biswap, which tweeted that Binance has made the difficult decision to disable Binance Connect on August 15th due to its provider closing the supporting card payments service.
The spokesperson explained that Binance periodically reviews its products and services to ensure focus on core efforts that align with long-term strategy. Over the past six years, Binance has grown from being an exchange to a global blockchain ecosystem with multiple business lines. Binance consistently adapts and modifies its business approach in response to changing market and user needs.
Binance Connect, formerly known as Bifinity, launched on March 7, 2022. The service acted as a fiat-to-crypto payments provider, connecting crypto firms with the traditional finance system. At its launch, the platform supported 50 cryptocurrencies, along with fiat payment methods such as Visa and Mastercard. Binance Connect also served as the fiat-to-crypto on-ramp provider for the firm’s self-custody Trust wallet.
The announcement of the shutdown comes as the United Kingdom’s Financial Conduct Authority (FCA) expressed concerns over Binance’s subsidiary, Bifinity, providing a $36 million convertible loan to crypto investment firm Eqonex, which is listed on Nasdaq. The FCA highlighted that certain holders of Bifinity’s parent company, Binance Group, which is unregulated in the UK, may be considered beneficiary owners of Eqonex.
This shutdown is not the only regulatory setback faced by Binance. Binance Australia suspended its fiat services due to an issue with a third party, and German regulators rejected Binance’s crypto custody license request. However, Binance was able to secure a crypto broker-dealer license with regulators in Dubai.
Currently, Binance is engaged in legal battles with the US Securities and Exchange Commission and Commodity Futures Trading Commission. These regulatory agencies have accused Binance of operating an unlicensed exchange in the United States.
Binance’s decision to shut down Binance Connect reflects the company’s ongoing efforts to adapt to the evolving regulatory landscape and focus on core business lines that align with its long-term strategy. Despite facing regulatory challenges in various countries, Binance continues to explore new opportunities and expand its global reach in the cryptocurrency industry.
In conclusion, the closure of Binance Connect is a strategic move by Binance to realign its resources and adapt to changing market conditions. As the cryptocurrency landscape continues to evolve, Binance remains committed to navigating regulatory challenges, expanding its business lines, and providing innovative solutions to its global user base.