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EU Users of Binance: Paysafe Blocks Withdrawals ahead of Service Termination

source-logo  financemagnates.com 20 September 2023 04:35, UTC

Fiat withdrawals for some Binance users in the European Union have been blocked much ahead of the end of support by the crypto exchange's local payment provider, Paysafe, Coindesk reported.

Paysafe Ends Support to Some Binance Users in the EU

Paysafe has already ended its partnership with Binance and will terminate its support on 25 September. However, the payment processor has already blocked fiat payouts to several Binance users.

"As a high-frequency Paysafe service user, Paysafe closed your account early to speed up this process. Any remaining EUR/GBP in your account can be withdrawn once the review is completed," a notification received by a Binance user in the EU stated, the report cited.

Binance also confirmed to the crypto-focused publication that Paysafe imposed an "early closure review" on a "very small portion." It only affected 0.085 percent of Binance users with Paysafe accounts. However, the accurate reasoning behind it is unknown.

"We're actively working to speed up the return of funds from Paysafe to all affected users. We will notify users immediately through the Binance app, along with a follow-up email, once Paysafe informs us that reviews are complete," Binance added.

The End of Partnership

The crypto exchange tapped the services of Paysafe, a payments processing company, last year in May to process withdrawals and deposits with euro and British pound. However, Paysafe first pulled out its services from facilitating GBP payments last May and decided to terminate its deal with the crypto exchange in the following month after a "strategic review."

Although Paysafe did not clarify the reasons behind its decision, it was taken when Binance and its CEO, Changpeng Zhao, were slapped with lawsuits by two top US regulators. The exchange is even facing regulatory scrutiny in other jurisdictions, including Australia and the European Union.

In a response to Coindesk, Paysafe said it "cannot speculate in the media on why this particular customer is unable to make transactions and it is Binance who holds the relationship with the customer not Paysafe," adding services to Binance customers "are fully operational with our contractual and regulatory obligations."

The US arm of Binance also faced payment-related troubles after its two banking partners collapsed. Although Binance.US became a crypto-only exchange following the SEC lawsuit against it, the exchange partnered with MoonPay last month for on-ramp services.

Meanwhile, Binance and its troubled US arm are witnessing an exodus of departures from the management. The companies also laid off dozens of employees.