Key Points:
According to Forbes, this decision comes after Checkout processed between $300 million and $400 million in Binance transactions in recent months.
In a sequence of letters exchanged between Checkout CEO Guillaume Pousaz and Binance, Checkout highlighted regulatory actions, orders, and inquiries from partners as the basis for the contract termination.
The second letter, sent two days after the first, raised additional concerns regarding Binance’s anti-money laundering, sanctions, and compliance controls.
Binance, in response, expressed disagreement with Checkout’s reasoning and hinted at potential legal action. The crypto exchange emphasized its efforts in building a robust compliance program and maintain partnerships despite Checkout’s withdrawal.
The partnership between Binance and Checkout.com mutually benefited both companies. Binance, striving to establish itself in the crypto market, gained a reliable payments processor, while Checkout.com gained transaction volume and legitimacy.
However, disagreements arose when Binance launched Checkout’s platform without implementing 3D-Secure, a security measure to prevent money laundering and comply with EU payment standards.
This left the platform susceptible to fraudulent transactions, ultimately leading to a dispute over fraud-related losses.
This sudden split also follows Binance’s decision to discontinue Binance Connect, its crypto buy-and-sell arm, which Checkout had supported. Binance downplayed the impact of this move, noting the service had a limited user base.
Checkout.com’s decision marks a significant setback for Binance, instrumental in elevating the payment processor’s status. In 2021, Checkout processed around $2 billion in Binance transactions in a single month, which contributed to Checkout’s valuation of $40 billion during a $1 billion funding round.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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