Santander UK has banned payments to cryptocurrency exchange Binance, according to an email sent to its customers this Thursday.
In the email, the banking behemoth claims that the move is meant to protect its clients against fraud while citing a recent warning about a Binance entity issued by the Financial Conduct Authority:
We're stopping payments to Binance for your protection. We want to let you know that from 8 July 2021, we'll be stopping payments from Santander accounts to Binance wherever possible. This follows the Financial Conduct Authority (FCA)'s recent warning to consumers and is to help protect you from fraud. For now, we won't be restricting payments from Binance into your account(s). We're taking this step as we want to do everything we can to protect you and help keep your money safe. Well continue to monitor the situation, and let you know if anything changes.
The bank will continue monitoring the situation.
As reported by U.Today, Barclays halted debit/credit card payments to Binance on July 5 due to the FCA notice regarding Binance Markets Limited not being able to conduct any regulated activity in the U.K.
Prior to that, the world's largest cryptocurrency exchange by reported trading volumes claimed that the consumer warning regarding its entity wouldn't impact its services in the country. It described Barclays's decision as "disappointing."
Earlier this week, Binance also suspended euro bank deposits from the Single Euro Payments Area (SEPA) network in another sign of regulatory woes.
Thriving off of Binance's predicament
Binance's predicament with regulators has benefited rival exchanges. Bitstamp CEO Julian Sawyer recently told CNBC that the exchange was seeing an uptick in customers:
We’re seeing an increase in customers in the U.K. coming to us, with no changes in marketing
Kraken, another major crypto exchange, has also registered a recent uptick in new registrations despite the fact the market has cooled off.
Beefing up compliance
Binance, however, is ready to face the regulatory pressure. In a recent blog post devoted to the crypto giant's four-year anniversary, CEO Changpeng Zhao said that compliance is "a journey":
Compliance is a journey – especially in new sectors like crypto...We hope to clarify and reiterate our commitment to partner with regulators, and that we are proactively hiring more talent, putting in place more systems and processes to protect our users.
The company recently poached eToro Money UK's director of compliance Jonathan Farnell amid intense regulatory scrutiny all over the world.
Apart from the U.K., Binance has also drawn the ire of regulators from Canada, Japan, the Cayman Islands, Thailand, and Poland.
In May, Bloomberg reported that the top exchange was also being investigated by multiple federal agencies in the U.S.