Binance Connect, the regulated cryptocurrency trading platform associated with Binance exchange, is set to cease operations on August 16. According to a spokesperson, this decision is a response to the evolving market dynamics and user requirements.
Concurrently, decentralized exchange Biswap, operating on the BNB Chain, announced on the same day that Binance had chosen to discontinue Binance Connect due to the closure of the card payments service provided by its partner. A Binance spokesperson elaborated that the decision was aligned with the company’s strategy of focusing resources on core endeavors in line with the organization’s broader blockchain ecosystem. The spokesperson emphasized the agility with which Binance adapts its approach to accommodate shifting market trends and user demands.
Initially launched as Bifinity on March 7, 2022, Binance Connect was conceived as a conduit for fiat-to-crypto transactions, enabling crypto companies to interact with traditional financial systems. The platform offered support for approximately 50 cryptocurrencies and allowed for fiat payments via Visa and Mastercard. Notably, Binance Connect played the role of a fiat-to-crypto on-ramp for Binance’s Trust wallet, a self-custody solution.
However, Binance’s recent regulatory encounters have cast shadows over its operations. The Financial Conduct Authority (FCA) in the United Kingdom expressed concern over Bifinity’s provision of a $36 million convertible loan to Eqonex, a crypto investment firm listed on Nasdaq. This led to the FCA raising questions about potential beneficiary ownership relationships between certain stakeholders of Bifinity’s parent company, unregulated Binance Group, and Eqonex.
The shutting down of Binance Connect is yet another development in a series of events that have put Binance in the regulatory spotlight. This year alone, Binance Australia suspended its fiat services due to third-party issues, while German authorities rejected the exchange’s request for a crypto custody license. Binance, however, secured a crypto broker-dealer license from Dubai regulators in July. The exchange is currently embroiled in legal battles with the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over alleged unlicensed operations in the United States.
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