Global payment giant Mastercard is reportedly ending its cryptocurrency card partnership with Binance crypto exchange next month, according to a recent Bloomberg report. The decision to terminate the program in Argentina, Brazil, and Colombia starting on September 22nd may be attributed to increased regulatory scrutiny of the crypto exchange.
Mastercard clarified that the termination of the partnership will not affect its other crypto card programs. The wind-down period will allow cardholders to convert their holdings in their Binance wallets. The prepaid crypto card, a collaboration between Mastercard and Binance, enables users to make payments in local fiat currencies using their crypto holdings on the exchange.
This move comes approximately one year after Binance and Mastercard first joined forces in August 2022 to launch a prepaid card for Argentine residents. In the early months of 2023, the collaboration expanded with another prepaid crypto card introduced in Latin America.
The termination of the partnership is seen as a response to the renewed regulatory challenges faced by Binance globally. Binance and its CEO, Changpeng “CZ” Zhao, have been sued by the United States Securities and Exchange Commission (SEC) for allegedly violating local securities laws. Additionally, the U.S. Commodity Futures Trading Commission (CFTC) has also filed a lawsuit against Binance for not properly registering with the derivatives regulator.
Furthermore, Binance is reportedly under investigation by the U.S. Department of Justice for permitting Russian users to utilize the platform in violation of U.S. sanctions.
It is worth noting that Mastercard is not the only company distancing itself from Binance due to its regulatory troubles. Visa also halted the issuance of new co-branded cards with Binance in Europe starting from July, according to Binance’s statement.
Cointelegraph reached out to Mastercard, Visa, and Binance for comment on these developments, but no immediate response was received.
In conclusion, Mastercard is ending its cryptocurrency card partnership with Binance in several Latin American countries, attributing the decision to the heightened regulatory scrutiny surrounding the crypto exchange. The termination of the partnership comes amidst legal action taken against Binance by regulatory bodies such as the SEC and CFTC. Together with Visa’s decision to cease issuing co-branded cards with Binance in Europe, these developments reflect the increasing challenges faced by Binance in the regulatory landscape.