Cryptocurrency exchange Binance is contemplating taking legal action against its former payment provider, Checkout.com, according to a spokesperson for Binance on August 18.
The potential legal conflict stems from communications dispatched by Checkout.com to Binance on August 9 and August 11.
As reported by Forbes, Guillaume Pousaz, CEO of Checkout.com, terminated the partnership with Binance due to concerns regarding regulatory actions, Anti-Money Laundering (AML) measures, sanctions, and compliance controls within relevant jurisdictions.
A Binance representative responded via email, stating, “We do not agree with Checkout’s purported basis for termination and are considering our options for legal action.”
The spokesperson emphasized that on-ramp and off-ramp services on the exchange are unaffected by this dispute.
However, the discontinuation of the business relationship prompted Binance to close down Binance Connect on August 16.
Launched in March 2022, Binance Connect was a regulated platform facilitating crypto buy-and-sell operations.
The platform supported over 50 cryptocurrencies and fiat transactions, bridging the gap between crypto firms and the traditional financial system.
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At one point, Binance had been the largest customer of Checkout.com, processing around $2 billion in transactions in a single month in 2021.
Binance has encountered a series of setbacks in recent months, leading to its global branches struggling to secure partnerships.
In June, the exchange disclosed the discontinuation of support from its euro banking partner, Paysafe Payment Solutions, in Europe.
The Australian branch faced a sudden cutoff from the banking system in June.
Similarly, Binance.US confronted challenges in finding banking partners in the United States, with former collaborators Silvergate and Signature Bank facing closures during the banking crisis earlier this year.
The ongoing crisis has even prompted Binance CEO Changpeng Zhao to explore the possibility of purchasing a bank, as he revealed in an interview.
The legal and operational challenges faced by Binance do not seem to be abating.
On June 5, the U.S. Securities and Exchange Commission filed a lawsuit against the global exchange and its CEO, accusing them of violating securities laws and engaging in the unregistered offering of securities in the United States.
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