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Binance stops Brazilian transactions due to central bank policy

binance
TL;DR Breakdown
  • Binance has cut links with Capitual leading to a halt in transactions in Brazil.
  • That’s in reaction to a Central Bank of Brazil policy shift affecting Binance operations.
  • Binance had earlier halted all Bitcoin withdrawals from its platform, citing blockade.

Binance, the leading crypto exchange platform, has stopped transactions through Pix in Brazil. Technically, the exchange stopped all deposits and withdrawals through the Brazilian government payment system.

The firm, through a statement, announced that they had cut ties with Capitual. For almost two years, Capitual has been at the center of processing Binance transactions via Pix.

Part of the statement the exchange made was touching the clients. They clarified that transactions made through Pix are failing due to Policy changes. They accuse the Central bank of Brazil of the policy change that has made their operations impossible. However, Binance did not provide any specifics about the policy adjustments.

The service blockade seems planned. It coincides with the deadline that the Central Bank set for Pix providers to apply the new know your customer criteria.

Binance is on the verge of replacing Capitual

Binance will replace Capitual with a native payments merchant with much experience. We will make the announcement soon

Binance

Besides, the exchange intends to file charges against Capitual. Yet, it did not provide any other details about the nature of the legal action.

According to the firm, the exchange is acquiring the local brokerage called Sim;paul. So far, it has approvals from the Securities and Exchange Commission and the Central Bank.

The exchange platform notified its users that it might take up to 72 hours to clear withdrawals and deposits made through Pix. The entity also mentioned that consumers can still conduct transactions with one another. However, they restrict such transactions in the form of peer-to-peer money transfers.

The move might see the exchange lose some clients in Brazil as they struggle to acquire another partner. 

Besides, the Know your client policy in play will ensure seamless operations in the country, and eventually, Binance might welcome it.

This week, KuCoin, which also collaborates with Capitual, announced an update to its Know Your Customer (KYC) policies. The corporation began directing its clients in South American nations to the website of Capitual. There, they would finish the identification verification process.

Binance halts Bitcoin withdrawals

Earlier in the week, Binance halted BTC withdrawals citing stuck transactions. The halt in trade came when crypto markets were experiencing a severe downturn. Initially, the pause was to last for less than 30 minutes. However, it took longer.

The cause for the halt was the Secure Asset Fund for Users insurance fund (SAFU.) The firm established SAFU for its users four years ago. The fund consists of Binance coin, Binance USD, and bitcoin.

Binance described the problem in a blog post published at 9:15 in the morning. “Earlier batch of transactions became stalled because of the low transaction fees. Thus resulting in a backlog of withdrawal requests from the Bitcoin network. The exchange is working on a solution to restore withdrawals from the Bitcoin network as soon as possible.”

The announcement came when crypto markets were experiencing a significant downturn. According to CoinMarketCap, the price of bitcoin has dropped by around 14% over the previous twenty-four hours. In the same period, there has been a decline of more than 15 percent in the value of Ether.

Recent months have been rough for the vast majority of cryptos. Bitcoin and Ether are no exception. In the past month, Terra saw a notable collapse that was severe enough to attract the notice of Janet Yellen, the Secretary of the Treasury.

Even platforms have had a difficult time with it. Celsius’s cryptocurrency loan business stopped all withdrawals, swaps, and transfers between accounts. They cited market conditions and the necessity for “stabilizing liquidity.” This decision came only hours before Binance halted all bitcoin operations. The value of other trading platforms that enabled trading in cryptos, such as Robinhood and Coinbase, has also decreased. All this is a result of the crypto market fall.

Nellius Irene

Nellius Irene

Nellius Irene is a cryptocurrency investor and journalist who has been in the nascent space since 2018. She has researched and written on several crypto-related topics including non-fungible tokens (NFTs), decentralized finance (DeFi), fundraising, mining, etc. Her major focus is covering regulatory events that are capable of shaping the entire crypto ecosystem.

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