Cryptocurrency exchange Binance suspends deposit option from European banks due to regulatory pressures in the region.
The world's largest cryptocurrency exchange platform, Binance, amid regulatory problems, suspends deposits from European banks. Thus, users of the platform will not be able to transfer euros to the platform from their bank accounts. However, the measure does not affect the procedure with credit and debit cards.
The suspension by the exchange was notified to its users last Tuesday and came into effect on Wednesday, July 7. In this way, the platform faces pressure from regulators concerned about the growing use of cryptocurrencies in the Euro zone.
It should be noted that the cancellation of bank transfers to the platform covers the entire Single European Payments Area (SEPA). In the notification, the cryptocurrency exchange's management made it clear to its users that the measure was taken for reasons beyond the platform's control. Despite this, it did not explain what the specific reason behind the abrupt suspension was.
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Why is Binance suspending the deposit option from SEPA?
In the message where Binance is notified that it is suspending the option of deposits from European banks, but no specific reason is given. Therefore, it can be intuited that behind this, the pressure of the regulators on the exchange platform of these financial assets influences.
It should be noted that Binance offers a wide variety of services. This makes it attractive to millions of people. For example, with an account on this platform, one can avoid opening accounts at numerous other firms due to its versatility.
For example, from Binance, mining machines can be connected to its pool for Bitcoin and Ethereum. At the same time, they can be stored thanks to its wallet service. The P2P buying and selling and conversion options are very convenient.
Also, the possibility of trading with low conversion costs gives Binance a great attraction. From spot trading to future options can be traded to increase users' capital. It should be noted that trading, as in any platform, involves a significant level of risk. For people who do not wish to put themselves at risk and still increase their funds, there is the option of stacking.
The world's largest cryptocurrency exchange, Binance, suspends SEPA deposits via bank wire transfers. Source: Twitter
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The concern of the traditional financial world
This wide range of possibilities offered by the platform, to which is added the possibility of operating the Decentralized Finance (DeFi) dApps. Moreover, the recently launched market of non fungible tokens (NFT), complement a universe of possibilities uncomfortable for traditional financial institutions.
The latter leads to assume as true that Binance suspends deposits from European banks not of its own volition. The fact that this or other exchanges with similar, are the vehicles in the imminent mass adoption of cryptocurrencies, would hurt traditional banking. Therefore, it is not strange that the same reacts to stop the usability of these platforms.
Although Binance is a centralized platform, so it can be considered as a kind of bank, it is in parallel an unwelcome competition. That millions of people have autonomy beyond the central control of governments and financial institutions is not something that can be allowed in a good way by the latter.
Therefore, many banks have acted pre-emptively. In that sense, some users have shown in social networks notifications from their banks about the suspension of deposits to Binance.
Decision of Barclays Bank of England
Another fact directly related to this situation happened recently. The British giant Barclays announced to its users the blocking of the option to transfer to Binance. The action of the financial giant was to "protect" the money of its users from a platform not legally regulated by London.
Some users reacted on Twitter with harsh terms against the decision of this financial firm. "They will have to disconnect the Internet to prevent us from continuing to use cryptocurrencies. They are the future, you are the past," commented one user.
Another user used the label "China 2.0", referring to Beijing's recent aggression against digital currencies.
With the refusal of the use of this platform, England joins important economies in which Binance is not allowed to operate. These include the United States, Japan and Canada. Despite this, the exchange remains solid as the main platform for trading cryptocurrencies.
Regulators act aggressively
If Binance suspends deposit transactions from banks in other countries, it could face serious problems. For months, regulators have been coordinating efforts to curb the advance of cryptocurrencies.
The easiest target are the exchanges, since they are centralized. These platforms face the dilemma of operating in compliance with regulatory requirements or maintaining their position of protecting the privacy of their users. At that point, it is very likely that they will end up accepting the conditions imposed by governments in order to maintain their dominance.