Binance Considers Legal Recourse After Checkout.com Cuts Ties
Binance is considering legal recourse after payment processor Checkout.com suddenly decided to cut ties with the cryptocurrency exchange.
Checkout.com’s termination letters issued Aug. 9 and Aug. 11 cite regulatory concerns, allegations of money laundering, and compliance inquiries.
However, Binance maintains a contrary position, stating that it does not agree with Checkout’s “termination rationale.” The company, which is led by CEO Changpeng Zhao, is reportedly seeking potential legal remedies.
Despite the dissolution of the partnership, Binance maintains that user services remain unaffected and that facilities on and off the slopes are operational.
The severed partnership spelled the end of Binance Connect, a crypto buying and selling platform authorized to operate. Launched in March 2022, the platform facilitates transactions between cryptocurrencies and traditional financial sectors. It played a pivotal role in handling nearly $2 billion in transactions for Binance in one month.
This disconnect exacerbates the ongoing challenges facing Binance. The exchange has had difficulty securing partnerships across its international offices due to so-called discounting procedures and regulatory issues.
European and Australian branches faced abrupt terminations of banking services, and Binance had difficulty finding US banking partners. To address these issues, Zhao considered purchasing a bank.
Binance and Anti-Money Laundering requirements
A Forbes editor suggested on Friday that when Binance first introduced the Checkout.com platform in early 2020, it neglected to integrate its primary anti-money laundering tool, 3D-Secure.
Subsequently, Visa reported an increase in fraudulent transactions, which were estimated to be around $10 million, to Binance shortly after the platform launched. This revelation sheds light on the complex challenges faced by Binance, further shedding light on the complexities of the operational landscape.
Last year, London-based Checkout.com began exploring ways to enhance encryption for payment purposes.
