Binance Considers Legal Recourse Against Checkout.com
Binance is facing the consequences of its severed partnership with payment processor Checkout.com. The latter abruptly decided to end their relationship due to regulatory concerns, money laundering allegations, and compliance inquiries. Binance, however, disagrees with Checkout’s reasons for termination and is considering legal action. Despite the breakup, Binance assures its users that their services are unaffected and operational.
End of Binance Connect
The dissolution of the Binance and Checkout.com partnership also marks the end of Binance Connect, a licensed crypto buy-and-sell platform. Binance Connect played a significant role in facilitating billions of dollars in transactions between the cryptocurrency and traditional financial sectors. The severed partnership adds to Binance’s existing challenges in securing partnerships globally.
Binance’s Anti-Money Laundering Oversight
A crucial oversight by Binance when introducing Checkout.com’s platform in 2020 was the lack of an anti-money laundering tool called 3D-Secure. After the platform’s launch, Visa notified Binance about a surge of fraudulent transactions worth approximately $10 million. This incident sheds light on the operational complexities faced by Binance and highlights the need for robust anti-money laundering measures.
Binance’s Struggles with Partnerships
Binance has encountered difficulties in securing partnerships across its international offices due to debanking measures and regulatory issues. European and Australian branches experienced abrupt banking service terminations, while Binance.US struggled to find U.S. banking partners. CEO Changpeng Zhao even contemplated purchasing a bank to address these challenges.
Hot Take
Binance’s severed partnership with Checkout.com is a blow to its operations and reputation. This incident underscores the importance of strong regulatory compliance and anti-money laundering measures in the crypto industry. Binance will need to address these challenges and build trust with potential partners to ensure its future success.
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