Binance Connect to shut down effective Aug. 15

Binance Connect, formerly known as Bitfinity, will cease operations today.

The announcement came from Biswap, a decentralized exchange platform on BNB Chain, via a tweet. Binance Connect’s discontinuation was attributed to its provider ending support for card payments.

Binance Connect was a payment infrastructure whose stated goal was to bridge traditional finance with emerging blockchains. Its platform supported over 50 cryptocurrencies and offered a range of payment methods.

However, Binance has recently faced severe legal challenges. The U.S. Department of Justice (DOJ) is reportedly considering criminal charges against Binance, with concerns about potential market panic. The apprehension stems from the possibility that indicting Binance could lead to a situation similar to the collapse of FTX, another crypto platform. The DOJ is contemplating alternative actions, such as fines or deferred agreements, to avoid widespread panic.

Furthermore, Binance and its founder, Changpeng Zhao, are already under scrutiny from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission. The SEC alleges that Binance operated an unregistered exchange in the U.S., allowing Americans to use Binance’s offshore platform. The potential indictment is part of a broader debate on crypto enforcement and regulation in the U.S., highlighting the need for clear regulations in the crypto industry.

Additionally, the SEC has filed a civil complaint against Binance, alleging multiple violations of federal securities laws. The lawsuit underscores the SEC’s stance that some cryptocurrencies are “securities” and thus subject to federal regulations. The Binance case reveals the SEC’s approach to the crypto industry, comparing traditional securities industry functions with their crypto counterparts.

Binance’s alleged evasion of U.S. regulations is central to the lawsuit. The company is accused of manipulating its Know-Your-Customer (KYC) processes to conceal its U.S. customer base and avoid regulatory oversight. Binance also allegedly encouraged U.S. customers to use virtual private networks (VPNs) to hide their locations and bypass restrictions.

Of Binance’s 62 million global customers, only 25 million had submitted KYC documentation. The company’s chief compliance officer reportedly stated that Binance intentionally circumvented KYC requirements.