Amid a backdrop of increasing regulatory scrutiny, Binance’s European payments provider, Paysafe, has started restricting euro withdrawals for some users ahead of its planned cessation of support on Sept. 25.
This move that has left many European customers of Binance puzzled and frustrated, with some users finding themselves unable to access their accounts well before the specified end date.
Ervin Ursic Kovac, a Binance customer, told CoinDesk that he had
“sent some ether (ETH) to his account on Sept. 12 and sold it for euros, but was unable to withdraw the currency, and was instead greeted with a pop-up message that my account had been closed early with no prior warning.”
A message from Paysafe indicated the premature closure was designed to “speed up this process,” stating that “any remaining EUR/GBP in your account can be withdrawn once the review is completed.”
Binance clarified that Paysafe had initiated an “earlier closure review” for only a “very small portion” of users. However, the reason for targeting specific accounts for early closure remains unclear. Paysafe did not provide any further comment.
Paysafe has been a key financial bridge for Binance users in Europe, facilitating fiat deposits and withdrawals via bank transfers in the EU’s Single Euro Payments Area (SEPA). The decision to end support for Binance emerged following a “strategic review” of the partnership, just months after Paysafe had also pulled its support for the British pound for new Binance users in May.
This alteration in the partnership landscape comes at a time when Binance is grappling with mounting regulatory scrutiny globally. Last year’s cryptocurrency market downturn spotlighted issues such as “mismanagement of customer funds and regulatory arbitrage” in the crypto industry at large.
Binance, in particular, is reassessing its market presence in various European countries like Belgium and Austria due to regulatory challenges. It aims to be compliant with the EU’s upcoming Markets in Crypto Assets (MiCA) rules, set to take effect next year.
While Paysafe stated that its services for Binance users “are fully operational with our contractual and regulatory obligations,” the unexpected early account closures have raised questions about the fine print of such obligations.