Binance customers face extensive sterling withdrawal outage

Binance customers endured a lengthy period in which they were unable to withdraw sterling, marking a significant outage for the crypto exchange that uses London as one of its main links to the region’s traditional financial network.

The Cayman Islands-registered entity said earlier on Tuesday on Binance.com that the ability to remove or add sterling to its main platform using bank cards had been “suspended for maintenance”. The move came a day after customers were also frozen out of Faster Payments, a major UK payments network that provides quick transfers between the country’s banks, a restriction that the exchange also said was due to “maintenance”.

The Faster Payments withdrawals service was restored late on Tuesday afternoon, according to Binance.com. Deposits using both card and Faster Payment remained unavailable, while withdrawals through cards were still down as of about 5.50pm London time on Tuesday.

The gating of Binance clients from the UK’s traditional currency market temporarily severed an important link to Europe’s financial industry.

It came just four days after the Financial Conduct Authority said Binance was not authorised to operate as a cryptoasset business in the UK and ordered it to stop any regulated financial activities — such as arranging investment deals — in Britain.

The FCA’s intervention primarily related to Binance Markets Limited, a London-based entity set up last year as part of an attempt to launch an exchange that would have allowed for the trading in cryptocurrencies against euros and sterling. Those plans were ultimately abandoned after a comprehensive review by the FCA, according to the regulator.

However, Binance had retained relationships with payments processors through other affiliates that were not registered with the FCA, according to terms of service posted on the group’s website.

Binance had told the Financial Times on Sunday that “the FCA UK notice has no direct impact on the services provided on Binance.com. Our relationship with our users has not changed.” It is not clear whether the payments outage is related to the FCA intervention. Several users who claimed they were Binance customers wrote on Twitter on Monday and Tuesday to complain about the withdrawal outage.

Checkout.com, a payments processor overseen by the FCA in the UK, confirmed on Monday that it typically handled credit and bank card transactions for Binance, but said that “we don’t have any relationship with Binance Markets Limited, therefore we are not in a position to provide any comment”.

“We continue to monitor the ruling by the FCA closely and ensure Checkout.com is in compliance with all regulatory orders,” it added.

The group did not immediately respond to a further request for comment on Tuesday. Clear Junction, a partner that typically provides access to Faster Payments through a lender called Clear Bank, also declined to comment on the situation, citing confidentiality agreements. Its chief executive, Dima Kats, said the company paid close attention to regulators’ actions.

Clear Bank, a UK institution that has direct access to the Faster Payments network, also declined to comment on the particular situation but said it “maintains an awareness of regulatory actions of this type”.

Faster Payments, which is run by Pay.UK, said it requires payment services providers connected to its platform, such as Clear Junction and Clear Bank, to “conduct appropriate due diligence on their customers”.