As Latin America (LATAM) continues to offer a promising future for fintech and crypto firms, Binance, the world’s largest crypto exchange, plans to minimize its operation in the region. In a blog post, the leading payment company in the world, Mastercard, revealed plans to terminate its crypto cards partnership with Binance in the coming month.
Binance and Mastercard Parts Ways
From September 22, Mastercard and Binance will wind down their crypto card projects in Brazil, Colombia, Bahrain, and Argentina. Remarkably the crypto cards have facilitated payments to conventional currency using digital assets for years.
In an email report, the Mastercard spokesperson restated that the payment company will cut ties with Binance in September. The spokesperson confessed that the closure of the partnership would have minimal impact on its ongoing programs. It implies that Mastercard’s crypto-card partnership with Gemini will continue with minimum interruptions.
He added that between now and September 22, the LATAM cardholders should transfer their assets to Binance wallet. The August 24 announcement has created mixed feelings among Latin American.
Commenting on the email conversation, the LATAM users demanded to know why Binance and Mastercard agreed to part ways. Upon contacting the Mastercard spokesperson, the Bloomberg team reported that the payment company failed to clarify the reason that contributed to the decision.
Binance Grappling Regulatory and Legal Action
In April, the head of Mastercard’s blockchain and crypto unit, Raj Dhamodharan, announced that the payment company is seeking strategic partnerships with crypto firms. The executive stated that the Binance card issued by Mastercard ussually undergoes due diligence checks and is regularly monitored.
Mastercard’s top rival, Visa Inc., ended its card partnership in Europe with Binance in July. The Visa team decided to end supporting Binance cards due to regulatory pressure battling the controversial crypto exchange.
Lately, the Binance team has faced regulatory backlash in different jurisdictions. A few months ago, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance and the chief executive, Changpeng Zhao, for violating the securities and federal laws.
Subsequently, the Commodity Futures Trading Commission (CFTC) accused Binance of failing to comply with the registration for crypto derivatives.
Elsewhere, the Department of Justice (DOJ) accused Binance of violating the US sanctions. The DOJ alleged that Binance facilitated peer-to-peer transfers through banks for Russians.
Nonetheless the regulatory tension facing Binance has forced companies to distance themselves from the beleaguered crypto exchange. In May, Binance Australia could not make deposits and withdrawals through bank transfers after its payment provider, Cuscal, ended access.
Afterward, Binance and its Euro banking partner Paysafe agreed to end their partnership next month. The Paysafe team has supported Euro bank transfers for Binance through the single Euro payment area (SEPA).