Binance Pulls the Plug on UK Cash Deposits – and Withdrawals

Justin Freeman

Binance Pulls the Plug on UK Cash Deposits – and Withdrawals

  • Crypto exchange Binance stops accepting deposits made in British pounds.
  • Withdrawals in sterling will cease on 22 May 2023.
  • Pressure from regulators identified for payment options being reined in.

The world’s largest cryptocurrency exchange Binance, the ‘go-to’ platform for many crypto investors, has halted deposit and withdrawal services through bank transfers and card payments for UK customers. Online payments agent Paysafe which until recently supported the transactions has quoted pressure from regulators, specifically the FCA, as the reason for them pulling out of the market.

More FCA pressure on crypto sector

The statement by Paysafe which explains their decision to stop supporting UK based transfers highlights how the UK’s primary financial regulator is clamping down on crypto trading.

“We have concluded that the UK regulatory environment in relation to crypto is too challenging to offer this service at this time and so this is a prudent decision on our part taken in an abundance of caution.”

Source: Paysafe / The Register

That’s far from a vote of confidence in the crypto sector as a whole, and reflects how firms such as Paysafe are moving away from servicing cryptoassets. Paysafe has fingers in other pies, especially the gaming sector, and the firm obviously feels that from a commercial point of view their interests are better met elsewhere.

Where does this leave Binance?

In response Binance referred to the number of customers using Paysafe to perform fiat deposits and withdrawals in the UK is “small” – in the region of 1% of its users. There is also a suggestion that Binance will try and set up an alternative route for those who have been shutout by Paysafe’s move. A spokesperson for the firm said, “We will share updates on this as and when we are able,” which doesn’t suggest that project is near being completed.

Where does this leave UK customers of Binance?

The more pressing concern for many crypto investors is the fact that GBP denominated withdrawals to UK customers will only be possible up to 22nd May 2023. Deposits have already been banned. That leaves those looking to scale out of positions a relatively short period of time to extract themselves from positions in markets notorious for having high price volatility.

A lack of new buyers in a market caps demand and that can lead to falling prices. With regulators other than the FCA suggesting they will also clamp down on the sector, that classic demonstration of supply and demand is something for crypto investors to keep in mind.

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Justin Freeman

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