Checkout.com, a credit card processing firm regulated by the FCA, ended its partnership with crypto platform Binance due to growing regulatory apprehensions about Binance‘s activities, as stated by Forbes. This decision was made despite Binance‘s substantial contribution to Checkout.com’s expansion and market value. The payment processor also raised concerns about Binance‘s adherence to compliance measures.
In two letters addressed to Binance on August 9 and 11, Checkout‘s CEO, Guillaume Pousaz, mentioned regulatory interventions and partner inquiries as the rationale for the split. Pousaz conveyed his disappointment in ceasing their services but wished Binance success in its future ventures.
Lewis Jones, a representative for Checkout, verified the contract’s termination. On the other hand, Binance challenged the reasons for the contract’s conclusion, suggesting possible legal repercussions. Binance’s spokesperson, Dewi Mustajab, assured, “Our services remain unaffected, and users can still access on-and off-ramps as they always have.”
Earlier in the week, Binance revealed the closure of its crypto payment tool, Binance Connect (formerly Bifinity), initiated in March 2022. This service ceased operations on Wednesday.
The split between Checkout and Binance came after Binance‘s decision to shut down Binance Connect. Checkout had been handling between $300 million to $400 million of Binance‘s transactions lately, a source revealed. This substantial transaction volume played a significant role in Checkout’s $40 billion valuation in a Series D funding round in January 2022.
Yet, Checkout challenged these transaction numbers, labeling them as “exaggerated.” The end of Checkout‘s alliance with Binance is significant, given Binance‘s instrumental role in elevating Checkout’s status in Europe. In 2021, Binance processed transactions worth about $2 billion in a single month, making it Checkout‘s premier client.
Both companies had reaped mutual benefits from their collaboration. Binance, aiming to gain trust in the traditional financial market, partnered with Checkout, which was distancing itself from processing payments for adult and gambling sites. This alliance offered Binance a crucial payment processor and gave Checkout a boost in transaction volume.
However, as regulatory oversight on Binance grew and another crypto client, FTX, faced challenges, Checkout reconsidered its heavy reliance on the crypto industry and revised its valuation.
