Binance, the world’s largest cryptocurrency exchange, has announced its intention to shut down Binance Connect, formerly known as Bifinity. The service was launched just over a year ago to provide a regulated platform for buying and selling crypto. Now it will be disabled on August 16 because the exchange has decided to focus on its main products and long-term objectives.
“We periodically review our products and services to ensure that our resources continue to be focused on core efforts that align with our long-term strategy. In the last six years, Binance has grown from being an exchange to a global blockchain ecosystem with multiple business lines. We consistently adapt and modify our business approach in response to changing market and user needs,” a Binance representative commented.
What is Binance Connect?
Binance Connect, initially known as Bifinity, was launched in March 2022. The service was aimed at helping firms become “crypto-ready”. The service supported 50 cryptocurrencies and all main payment methods, including Visa and Mastercard.
In June 2022, Binance announced cooperation with Trust Wallet, one of the most popular crypto wallets.
The exchange commented, “The integration between Binance Connect and Trust Wallet will provide a seamless way for users to access Web3 assets. Backed by the top world liquidity provider Binance, Trust Wallet users are now able to purchase more than 200 crypto assets with credit or debit cards directly, with more than 40 fiat currencies supported.”
“Our goal at Binance Connect has always been to increase crypto adoption and bridge the gap between traditional finance and the crypto economy. This partnership with Trust Wallet will help bring new users to Web3 in a convenient way,” added Helen Hai, the President of Binance Connect.
Why is the service winding down its operations?
At first, the news that Binance is shutting down the service came as a surprise, but later the exchange explained that it was caused by the decision of its provider to stop accepting card payments. Moreover, Binance is already going through a difficult time, as it is under the intense scrutiny of supervisory authorities, especially in the United States. So far, the Department of Justice is hesitant about bringing criminal charges against Binance, due to concerns about potential market panic. If new fines and restrictions are introduced, it could result in the exchange’s collapse similar to the FTX meltdown.
Moreover, the Securities and Exchange Commission and the Commodity Futures Trading Commission are already investigating the exchange and its founder Changpeng Zhao, who goes by CZ. According to their allegations, Binance operated an unregistered exchange in the United States, providing American residents access to its offshore platform. Binance is also accused of changing its Know-Your-Customer (KYC) processes to conceal its American customers and avoid regulatory control. Finally, the exchange also supposedly advised its American clients to use VPNs in order to hide their location and evade restrictions.
Amidst all this turmoil, CZ is being extremely cautious. Converting crypto to fiat in the absence of proper regulation is a very tricky business that can easily result legal claims. So, it is hardly a surprise that Binance Connect is shutting down.
