Published: March 15th, 2023
Leading crypto exchange Binance is set to end deposits and withdrawals in Sterling from 22nd May.
An email sent to customers on Monday, 13th March said the company’s payments processor Skrill, which provides Binance’s Faster Payments Service in the UK, has backed out of a deal to support GBP transactions.
At time of writing, new Binance accounts were restricted from making GBP deposits, though the company said in its email that current users would still be able to access their GBP balances until the May deadline.
According to Binance, the change affects less than one per cent of Binance customers.
Its not the first time the exchange has had difficulties accomodating trades in GBP.
Binance added its first Sterling trading pairs in 2020, ahead of the launch of its UK trading platform. At the time, British citizens could trade Pounds for crypto through the Binance Jersey subsidiary, an entity incorporated in the UK's Channel Islands low-tax jurisdiction
But a year later, Britian’s Financial Conduct Authority (FCA) watchdog told the company it had to cease all 'regulated activities’ in the UK until it received written consent.
Between June 2021 and March 2022, Binance users were blocked from using GBP or EUR to fund their accounts. The exchange found a way around the restrictions by using PaySafe-owned Skrill as its UK fiat partner, and reintroduced Sterling and Euro transactions.
A Skrill representative told Bloomberg that the company has since decided that the UK regulatory environment for cryptocurrency transactions ‘is too challenging at this time’.
‘In an abundance of caution we've taken a prudent decision to withdraw from the Binance relationship.’
Paysafe, which trades on the New York Stock Exchange (NYSE), reported fourth quarter earnings last week. The company said it had processed more than USD 130 billion in payments in 2022, up seven per cent from the previous year.
In a Reddit Ask Me Anything (AMA) session in May of 2022, Binance CEO Changpeng Zhao gave crypto traders investment advice and his take on de-risking crypto portfolios.
He said that most people need to diversify, ‘though I am not a good example.’
His holdings were (and apparently still are) spread between Bitcoin (BTC), Binance Coin (BNB), and other cryptos, but all on the Binance exchange. 'I use my Binance Card everywhere I go,’ he said.
The 40-something tech entrepreneur learned his trade designing trading systems for the Tokyo Stock Exchange and Bloomberg’s Tradebook derivatives trading platform. He launched Binance in 2017 and now holds 30 per cent of the company. With a net worth of over USD 17.2 billion, Forbes magazine has him at number 19 on its ‘richest people in the world’ list.
Zhao, known colloquially as CZ, answered a number of questions about Binance’s business, including its decision to trade LUNA despite the coin’s collapse, how Binance handles custody of trader funds, and the development pipeline for Binance Chain.
Asked why Binance resumed LUNA trading after the network's validators halted trading when the cryptocurrency’s value fell to USD 0.00 on a few weeks earlier on 8th May 2022, he said doing so put pressure on validators to re-start activity.
‘We did suspend trading for a short time when the validators paused the blockchain, and even that had our complaints line buzzing,’ he added. ‘I do think our actions forced the validators to re-start activity on the network again, which happened within a few hours.’
The risk to traders was acceptable, Zhao maintained, because crypto markets are open and free of bias.
‘No one was forced to trade (LUNA) just because trading was available. There are always buyers with a high tolerance for risk. The marketplace is neutral.’
Asked about the centralized structure of the Binance Chain, Zhao said that having a low number of validators supports faster transactions. He also said he isn’t directly involved in most technical decisions but would raise the issue with the development team.
'As I understand it we need to sustain a balance between the number of nodes and network performance as the blockchain evolves’.
On the topic of handling user funds on Binance, the world's biggest crypto exchange by trading volume, Zhao said that there is a wall between users’ money and Binance’s operational funds. If a bankruptcy or similar event were to occur, he promised that 'users would be refunded first, not shareholders.’
A month earlier in April 2022, Zhao told attendees at the annual Paris Blockchain Week Summit that France’s ‘pro-crypto’ regulatory regime deserved applause, and announced that Binance would be opening an office inside Station F, a Parisian start-up incubator.
Zhao told the summit that France is positioning itself to be ‘Europe's crypto industry leader’, describing the country as pro-business and pro-crypto, saying the government’s approach to regulation and overall attitude towards the industry ‘has been phenomenal.’
Station F is the world’s biggest business incubator, housing more than a thousand startups and partnering with the likes of Google, Facebook, and Microsoft.
The partnership deal with Binance meant any startup selected by the exchange would get free space in the facility and access to technical and administrative resources at Station F.
‘Our aim is to make Station F our creative and innovative base for further expansion into Europe’, said Zhao in a company press release.
After arguing for years that the company’s decentralised nature meant it had no need for physical headquarters, Zhao was assumed to be banking on France’s pro-crypto regulators to help the firm expand operations globally. The exchange spent much of last year arguing with regulators in the UK and elsewhere. Action by Dutch, Italian, Japanese, British, Malaysian, and even Cayman Islands regulators threatened to curtail or ban the exchange’s services in those jurisdictions.