Binance Connect unexpectedly shuts down after 2 years in operation

TL;DR Breakdown

  • Binance Connect, a subsidiary of the Binance platform, is set to end operations by Aug. 16, as revealed by a company representative.
  • The decision follows payment gateway issues and scrutiny from regulatory bodies, including the UK's Financial Conduct Authority over Binance Group's ties with another firm, Bifinity.
  • While facing challenges globally, including a denied license in Germany, Binance Connect achieved a significant win by securing a broker-dealer license in Dubai.

Binance, a dominant force in the cryptocurrency industry, is once again making waves. Binance Connect, a key segment of the Binance trading universe specializing in regulated cryptocurrency transactions, is slated to cease its operations by Aug. 16. 

Binance Connect’s evolving business trajectory

Amidst the news of this shutdown, Biswap, a decentralized exchange powered by the BNB Chain, underscored Binance’s challenging decision landscape. This involved suspending “@Binance_Connect on 15 August,” attributed to complications arising from their payment service provider discontinuing card-supported services.

Initially launched as “Bifinity” on March 7, 2022, Binance Connect aimed to be the nexus between the orthodox financial world and the burgeoning crypto ecosystem, seamlessly facilitating fiat-to-crypto transitions. With a commendable integration of 50 cryptocurrencies from the get-go, the platform was also receptive to mainstream fiat channels, such as Mastercard and Visa. However, its inception was not without challenges. Binance’s association with Bifinity attracted scrutiny from the UK’s Financial Conduct Authority (FCA) over the latter’s decision to extend a $36 million convertible loan to the Nasdaq-listed crypto enterprise, Eqonex.

Intriguingly, this raised several eyebrows, pushing the FCA to probe into the potential ambiguities surrounding the Binance Group, the umbrella entity over Bifinity, given its non-regulated standing in the UK. This led to conjectures that they might emerge as the principal stakeholders of Eqonex. On another front, Binance Connect was instrumental in orchestrating fiat-to-crypto transactions for its native Trust wallet.

Navigating further, Binance Australia hit a temporary roadblock, pausing its fiat services within the same month, citing unanticipated third-party complications. The month of June presented another challenge when German regulators turned down Binance’s appeal for a crypto custody certification. However, July marked a pivotal moment, witnessing Binance clinching a sought-after crypto broker-dealer license in Dubai. Currently, Binance is embroiled in a complex legal scenario, with U.S. regulatory authorities flagging concerns over its alleged unauthorized exchange undertakings on American soil.

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Mohammad Shahid

Mohammad Shahid

An IT and Cybersecurity graduate with specialized knowledge of cryptocurrency and blockchain, Mohammad joins the Repo elite team. He has worked on several blockchain development projects and is an enthusiastic crypto trader.