By Alicia Maher
Cryptocurrency exchange, Binance is definitely in dire straits. The leading crypto exchange has announced that it would temporarily suspend deposits from Single Euro Payments Area (SEPA). However, no reason was given for its latest decision. SEPA is an Europe-based payment service provider that allows users to conduct transactions with the Euro across the EU’s member states. Also, SEPA makes cross-border transactions as easy as domestic transactions in terms of transaction fees and duration. SEPA is active in 27 member states.
Binance issued mails on Tuesday to its users who make use of the SEPA payment system and claimed reasons beyond its control were responsible for the decision. However, it said the deposit suspension would only last for a week. On the contrary, withdrawals via SEPA will not be halted. Thus, users will have to look for another means to make deposits on the platform until the suspension is lifted.
The leading exchange has come under heavy scrutiny of late, leading to a series of crackdown in most countries where Binance’s operations are underway. It recently had to close shop in Ontario after the Ontario Security Commission increased regulatory heat on the exchange. The latest SEPA deposit suspension may be a calculated effort by Binance to pacify authorities as it is now in the spotlight of regulatory pressures. Moreover, it is not the only exchange being pressured to comply with existing regulations.
Binance Faces Class Action from Futures Traders
On Tuesday, Binance was the subject of a class action by a group of futures traders who initiated a lawsuit against it in view of an incident that occurred in February. According to details of the lawsuit, Binance was responsible for a series of liquidations that had occurred following the announcement that Tesla bought $1.5 billion worth of Bitcoin.
The group of traders, mostly from Italy and a few other countries, claimed that while trying to access their accounts and balances on that day, Binance’s systems were shut down, leading to losses running into millions of dollars. They claimed that Binance’s efforts at compensating them were not adequate. Hence, the lawsuit. The affected traders also threatened to petition the European Union and other concerned bodies.
Regulatory Pressure Forces Binance to Close Operations in the UK and Canada
Regulatory heat has also been turned up on the exchange and a host of other exchanges in regions such as the UK, South Korea, Japan and Thailand. Binance had its activities outlawed in the UK forcing it to close operations there. Thailand’s Securities and Exchange Commission argued that Binance was operating without license in the country. Regulations are on the increase in the US as well, with exchanges being asked to obtain operating licenses or be forced to leave the country if they failed to comply.
With the pressure coming from all these regions, it has in turn had a ripple effect on the crypto market as the price of Bitcoin has been experiencing fluctuations since the major May crash. The crypto mining industry is also facing challenges, especially from countries like China.