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Binance BNB Tanks As Exchange Struggles In The EU — Sparks Exchange Collapse Fears

Published August 22, 2023 4:42 PM
Omar Elorfaly
Published August 22, 2023 4:42 PM

Key Takeaways

  • Binance suspends Euro withdrawals and deposits due to payment processor issues
  • Company’s native coin BNB slumps following EU troubles news
  • Investors and customers should pay close attention to BNB to determine Binance’s future

A Tweet by Binance that has since been deleted raised alarms among stakeholders as the exchange responded to a user who reported  an issue when withdrawing fiat Euros from his account.  

Binance has since apologized for its response, calling it an “error.” However, investors and customers started speculating on the future of Binance as the company’s message implicitly admitted issues with its payment processing provider in Europe.

The news comes weeks after Paysafe Payment Solutions, Binance’s European payment partner, announced  terminating its partnership with the exchange.

As a result, the exchange’s native token, BNB dived, signaling further financial troubles for the company.

Legislators And Institutions Abandon Binance

This week, Guillaume Pousaz, CEO of Checkout.com, formerly Binance’s payment processing partner, announced the termination of the company’s contract with Binance. 

Pousaz cited factors such as “reports of regulators’ actions and orders in relevant jurisdictions” and “inquiries from partners.”

Pousaz’s announcement came as a shock as business with Binance had been a smashing success, as Checkout.com processed over $2 billion for the crypto exchange so far.

On top of that, Binance has been forced to cease its business in several EU countries, mainly due to failing to comply with the EU’s anti-money laundering regulatory framework.

The company has so far lost its license to trade in the UK, Germany, Netherlands and Cyprus. Moreover, Binance is currently under investigation in other EU countries such as France.

Binance Single Euro Payments Area Issues

Binance has since deleted its response to the user who complained about the inability to withdraw Euros. However, once something goes on the internet – especially of that caliber of significance – it never leaves the internet.

Binance responds to a user who claims can't withdraw Euros from the platform
Binance tells a customer it can’t process SEPA transactions due to problems with the payment processor

A Binance spokesperson told CCN that “the SEPA deposit and withdrawal service will continue until 25 September as originally communicated. As we approach that date, some users may occasionally be asked for more information as part of routine compliance checks, which could lead to early closure of their accounts.”

“We apologize for the inconvenience and it is important to note that we will have alternatives for our users in place before the end of the SEPA service,” he added.

BNB Tanks Once Again

Binance’s problems are not limited to the European market as the exchange is currently facing lawsuits filed by the US Securities and Exchange Commission.

US markets regulating body claims the company committed several legal fouls, including wash trading, and commingling customer funds.

As a result of recent news about Binance’s inability to sustain its SEPA payment process, BNB took a plunge .

BNB falls to a new low
BNB prices react to Binance’s EU SEPA troubles

While BNB may seem to some as just another token the exchange offers for trade among its repertoire of Bitcoin, Ethereum and many other tokens, BNB holds a substantial significance regarding the company’s success.

Binance staff hold over 40% of the total BNB circulation available and that includes Changpeng Zhao, company’s CEO and founder.

While Binance has proven that it holds in its vaults more than enough of any token to meet customer demands, it maintains secrecy on the BNB whose pricing and liquidity define the company’s status.

Should the company start liquidating its own stash of BNB, the market is likely to react with a bullish liquidation, driving the token to the ground. That, in turn, would directly impact the company staff savings and investments.

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