Mastercard has taken the decision to end its partnership with Binance, a prominent cryptocurrency exchange, citing increased regulatory scrutiny. Effective September 22nd, the termination will impact four crypto card initiatives in Argentina, Brazil, Colombia, and Bahrain. Binance’s cards allowed users to conduct transactions in traditional currencies backed by their cryptocurrency assets on the Binance platform. This move follows Visa’s earlier decision to halt the issuance of co-branded cards with Binance in Europe back in July.
Mastercard collaborations with exchanges
While Mastercard maintains collaborations with other crypto exchanges, such as Gemini, the termination of the Binance program is a consequence of the regulatory challenges faced by the exchange. US regulatory bodies filed a lawsuit against Binance and its CEO, Changpeng Zhao, in June, accusing them of planning deceptive activities. Binance has expressed its determination to vigorously defend its position against these allegations.
Raj Dhamodharan, the executive overseeing crypto and blockchain at Mastercard, had previously hinted at the company’s intent to form more alliances with crypto entities. However, he underscored the significance of thorough due diligence and continuous scrutiny for all card programs without specifically referencing Binance.
The reasons behind the termination and the decision-makers involved remain undisclosed as Mastercard declined to comment on the matter. Binance is expected to release a statement in response to an email inquiry but has yet to do so.
Interestingly, Binance recently communicated through its customer support platform, formerly known as Twitter, that the Binance Card would no longer be available to users in Latin America and the Middle East. The exchange has come under increasing scrutiny in various countries, including the UK, where its operations faced restrictions.
FCA Warnings against binance
The UK’s Financial Conduct Authority (FCA) issued a warning against Binance, stating that the platform is not authorized to conduct regulated activities in the country. In Japan, the Financial Services Agency (FSA) accused Binance of operating without proper authorization. These incidents highlight the growing regulatory challenges and scrutiny faced by Binance across different jurisdictions.
In the United States, Binance has faced lawsuits from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for alleged violations of securities laws. Additionally, Binance has faced criticism for its cooperation with the Russian payment processor, Advcash.