Santander, one of Europe’s largest banking groups, has tweeted it will stop customer payments to Binance. It cited the rise in fraud and a need to keep their customers safe.
The firm also mentioned a recent Financial Conduct Authority (FCA) notice that warned that Binance is not licensed to operate in the U.K.
“In recent months we have seen a large increase in UK customers becoming the victims of cryptocurrency fraud. Keeping our customers safe is a top priority, so we have decided to prevent payments to Binance following the FCA’s warning to consumers,” the bank said.
In recent months we have seen a large increase in UK customers becoming the victims of cryptocurrency fraud. Keeping our customers safe is a top priority, so we have decided to prevent payments to Binance following the FCA’s warning to consumers.
It joins a list of U.K banks that have sounded the alarm on dealing with crypto firms recently. This includes Monzo, TSB, Nat West, Metro Bank, HSBC, Lloyds, and Barclays.
Binance CEO, Changpeng Zhao, responded to the matter in a recent letter. Although Zhao didn’t address any specific case directly, he said clearer regulatory guidelines are needed.
But some say Binance, as the world’s largest exchange, is being targetted as part of a wider clampdown on the cryptocurrency sector.
Santander gives Binance the snub
Santander’s decision comes as U.K banks come to grips with the extent to which they should let customers deal with crypto exchanges over concerns of lack of regulatory oversight and varying compliance standards among different exchanges.
One Twitter user implied that Santander is overstepping the mark in determining how its customers can spend their own money. He added that he thinks the decision is based on more than just “protecting us.”
“I am not a child. As a result, I will be looking to move my money elsewhere. You think your customers are gullible enough to believe it’s to “protect us,” why not ban gambling sites? Why not ban alcoholic drink companies? Why not ban fast-food restaurants? Where will it stop,” they wrote.
The Financial Action Task Force is coming for crypto
Observers speculate the global regulatory crackdown on Binance stems from the Financial Action Task Force (FATF). Earlier this year, FATF issued a revised guideline on how to approach cryptocurrencies.
The Director of Research at Coin Center, Peter Van Valkenburgh, slammed the revision as a mass warrantless surveillance against crypto users.
He points out the change in the definition of Virtual Asset Service Providers (VASPs) brings many more entities, including DEXes, under their remit. Van Valkenburgh also raised concerns about keeping compliance with data collection on transacting parties.
As such, banks are coming down hard on Binance for protection reasons. But in truth, it’s not about protecting you and me. It’s likely their reason for preventing payments to Binance, and other crypto exchanges, is about protecting themselves from the risk of non-compliance with FATF rules.
Zhao recognizes that “compliance is a journey.” He said Binance is committed to working with regulators.