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Adapting to Evolution: Binance Connect's Closure and the Ever-Changing Crypto Landscape

Aug 15, 2023 at 08:20 pm

Binance Connect Closure Scheduled for August 16 in Response to Evolving Market and User Demands

Binance Connect, the regulated fiat-to-crypto trading platform affiliated with Binance exchange, is set to cease operations on August 16. This decision was communicated by a Binance spokesperson, who stated that the move is a result of shifting market dynamics and changing user requirements.

The Binance spokesperson also relayed this decision on August 15 through an email exchange with Cointelegraph. Concurrently, Biswap, a decentralized exchange operating on the BNB Chain, posted on Twitter that Binance had taken the tough choice to deactivate @Binance_Connect on August 15 due to the discontinuation of card payment support by its provider. The spokesperson elaborated:

"At Binance, we periodically evaluate our range of products and services to ensure that our efforts remain focused on core initiatives that align with our long-term strategy. Over the past six years, Binance has evolved from being solely an exchange to establishing a global blockchain ecosystem encompassing multiple business lines. We consistently adapt and adjust our business approach to address the ever-changing needs of the market and our users."

Originally launched as Bifinity on March 7, 2022, Binance Connect functioned as a gateway for fiat-to-crypto transactions, connecting cryptocurrency companies with the traditional financial system. The platform initially supported 50 different cryptocurrencies and facilitated fiat payments through Visa and Mastercard. However, on the same day of its launch, the UK's Financial Conduct Authority (FCA) expressed concerns about Bifinity providing a $36 million convertible loan to the Nasdaq-listed crypto investment firm Eqonex.

The FCA's concern stemmed from the potential for certain holders of Bifinity's parent company, the unregulated Binance Group, to become beneficiary owners of Eqonex. Binance Connect also played the role of facilitating fiat-to-crypto on-ramp services for the self-custody Trust wallet.

Biswap twitterBiswap twitter

In the same month, Binance Australia suspended its fiat services due to third-party issues. In June, German regulators rejected Binance's application for a cryptocurrency custody license. Nevertheless, the firm managed to secure a crypto broker-dealer license from regulators in Dubai in July. Presently, Binance is embroiled in legal battles with both the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over allegations of operating an unlicensed exchange in the United States.

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