Visa Inc. and Mastercard Inc. have experienced a decline in business with cryptocurrency exchange Binance, indicating a growing wariness among traditional financial institutions. This loss of partnership comes as Binance faces intense regulatory scrutiny and concerns surrounding financial compliance within the crypto industry. Specifically, Mastercard will no longer offer Binance-branded cards in Latin America and the Middle East, which allowed customers to use their crypto assets for purchases. Binance assures that only a small percentage of users will be impacted by this change. Furthermore, Binance emphasizes that their accounts worldwide remain unaffected, and users can still shop and transact with crypto using their Binance Pay technology.
In a similar vein, Visa has also distanced itself from Binance by ending their card tie-up in Europe. This decision means that Visa will no longer issue new co-branded cards with Binance. It is important to note that Mastercard and Visa’s actions reflect the hesitance of the broader financial services industry towards crypto.
Mastercard’s previous shift towards embracing cryptocurrencies, such as offering crypto services to banks and merchants, is now contrasted by their termination of their partnership with Binance. However, Mastercard clarifies that this decision does not affect their commitment to enabling and securing digital assets, which they continue to support.
Meanwhile, Binance faces backlash from regulators including the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. The SEC has brought forth 13 charges against Binance and its CEO, Changpeng Zhao, accusing them of commingling customer funds with their own. Binance vehemently denies these allegations and has filed a protective order against the SEC. Furthermore, payment processor Checkout.com has reportedly dropped Binance as a customer due to concerns over compliance controls and actions by regulators.
Overall, the declining partnerships with Mastercard and Visa highlight the ongoing challenges faced by the crypto industry in gaining acceptance from traditional financial institutions.
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