Binance Connect to Cease Operations on August 16, Citing Evolving Market Dynamics
In a significant move resonating across the cryptocurrency industry, Binance Connect, the regulated cryptocurrency trading division of the prominent Binance exchange, has announced the cessation of its operations, effective August 16. The decision, attributed to the evolving landscape of market trends and user preferences, was confirmed by a spokesperson from Binance on August 15.
Biswap, a decentralized exchange built on the BNB Chain, took to Twitter on the same day to reveal that the decision to shut down Binance Connect was driven by the provider’s discontinuation of card payments support. The Binance spokesperson elaborated on the decision, stating,
“At Binance, we periodically review our products and services to ensure that our resources continue to be focused on core efforts that align with our long-term strategy. In the last six years, Binance has grown from being an exchange to a global blockchain ecosystem with multiple business lines. We consistently adapt and modify our business approach in response to changing market and user needs.”
Binance Connect initially launched on March 7, 2022, under the name Bifinity. Operating as a fiat-to-crypto payment facilitator, the service bridged the gap between cryptocurrency enterprises and traditional financial systems. Upon its introduction, the platform supported transactions involving 50 different cryptocurrencies, accepting fiat payments through leading card issuers like Visa and Mastercard.
However, its establishment was not without scrutiny. The Financial Conduct Authority (FCA) of the United Kingdom expressed apprehension about Bifinity’s provision of a $36 million convertible loan to Eqonex, a crypto investment firm listed on Nasdaq. The FCA indicated that this investment could potentially render certain holders of Binance Group, the parent company of Bifinity and an entity unregulated within the U.K., as beneficial owners of Eqonex.
Apart from facilitating transactions, Binance Connect also served as the fiat-to-crypto on-ramp provider for the renowned self-custody Trust Wallet.
Binance’s recent journey has been punctuated by both successes and challenges. In the same month as the Binance Connect announcement, Binance Australia had to halt its fiat services due to a third-party issue. German regulatory authorities declined Binance’s application for a crypto custody license, while the firm managed to secure a crypto broker-dealer license in July under the jurisdiction of Dubai regulators. Presently, Binance finds itself embroiled in legal disputes with both the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, accused of operating an unlicensed exchange within the United States.
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