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Europe and UK Binance Users React to Recent Restrictions Placed on Exchange

Binance users from Europe and the U.K. feel let down by both the exchange and their local financial institutions.

Jul 20, 2021 at 12:00 p.m. UTC
Updated Sep 14, 2021 at 1:27 p.m. UTC

On Thursday, Italy’s financial authority joined a growing list of regulators warning the cryptocurrency exchange Binance is not authorized to provide investment services in the country.

Filippo Cappella, a 25-year-old full-time crypto investor based in Italy. had been using Binance for some time, certain it was safe and regulated. But since Thursday’s warning he’s not sure he wants to keep using the platform.

“I read the news, and it’s not that great ... [N]ow I’m thinking of moving my funds out of Binance,” Cappella said.

Binance, one of the largest crypto exchanges in the world, is facing heat from a number of regulators across the globe from the Cayman Islands to Thailand, with much of the scrutiny and restrictions concentrated in Europe and the U.K. The platform announced Friday that it will end support for tokens linked to stocks effective immediately. Some crypto investors based in the U.K. and Europe, like Cappella, are frustrated with the recent developments with Binance, but don’t feel they will have a lasting impact on the future of crypto in the region. 

For instance, Llovonne Norfolk-St George, a U.K.-based swimming teacher turned crypto day trader, says she has not been able to deposit any funds to Binance since June 28.

After the U.K’s Financial Conduct Authority warned on June 26 that Binance’s global affiliate, Binance Markets Ltd., isn’t authorized to operate in the country, British banks Barclays, Santander and Clear Junction suspended payments to the crypto platform, while Nationwide said it is reviewing its policy on cryptocurrencies to help protect customers. Meanwhile, the European Union’s Single Euro Payments Area (SEPA) appeared to have also blocked payments to Binance. 

Binance is also shut off from the U.K.’s Faster Payments network.

“As a U.K. banking client, the [effect] of SEPA’s decision to prevent investors from moving money out of the banks and into [Binance] has absolutely cost me hundreds, if not thousands, of pounds in investment,” Norfolk-St George said, adding that it prevented her from topping up her account and taking advantage of the recent price fluctuations in crypto markets.

In April, Norfolk-St George transferred all of her crypto investments to the Binance platform, including a new investment of £20,000 (around US$28,000).

On July 1, Binance released a statement clarifying that Binance Markets Ltd. was a separate legal entity from www.binance.com

“The FCA Notice does not apply to the products and services provided through www.binance.com, nor does it change any arrangement with our users,” the statement said.

But a couple of days prior to publishing the statement, Binance U.K. users said that pound sterling deposits and withdrawals had been blocked by the exchange, although services were quickly reinstated.  

A few days later, Binance CEO Changpeng “CZ” Zhao published an open letter, stating that compliance is a journey. By July 13, however, the platform had once again suspended withdrawals. 

Chris Peake, a small crypto investor based in North West England, said that although he admires Zhao, he has removed all his funds from Binance until further clarity is provided to investors on where things stand. 

“I will warn everyone from using the exchange,” Peake said on Twitter. 

Meanwhile, Cappella tried to make a money transfer to Binance via SEPA on Thursday, but the crypto platform said it was unable to process the payment because of maintenance issues.

“Binance was saying it was maintenance but it was clearly not ... Binance is acting a bit weird regarding this,” Cappella said. 

Nothing to worry about 

A crypto influencer known only as “Andy,” who runs a popular YouTube channel on crypto investment called Operation Crypto and is a community director at Learning: Crypto U.K., is a Binance user, but he isn’t that concerned about the recent developments. 

“The main issues I’ve seen are a handful of U.K. banks stopping incoming/outgoing payments to Binance,” Andy said via a direct message on Twitter, adding that there are plenty of other ways to purchase or invest in cryptocurrencies. “I think personally that regulation is required for us to head towards mass adoption.”

Cappella thinks that the crackdown on Binance could give a huge boost to its more compliance-friendly rivals like Kraken and Coinbase, but that he has little faith in centralized exchanges in general. 

"It’s not Binance"

Norfolk-St George feels the recent restrictions on Binance in the U.K. say more about banks and traditional financial institutions than they do about crypto exchanges. 

“It’s not Binance that has restricted my money, it’s the action of my fiat banks and their partner companies,” she said. 

She called the quick and successive moves by financial institutions to block Binance “the action of the ‘scared’” and a “defeatist move,” likening the events to that of 2012 when Europe rose against the secretly negotiated international treaty Anti-Counterfeiting Trade Agreement (ACTA) that could have led to internet censorship.

“Crypto isn’t going anywhere and neither is Binance,” Norfolk-St George said. 

Despite Cappella’s intentions to move his funds out of Binance, he doesn’t feel restrictions on one exchange by one country can have a lasting effect on the crypto industry at large. 

“That's a reason why crypto has become so successful and so resilient. Decentralization doesn't care if one country bans it, because it just means another country right next to it is gonna say, ‘Come to us to do business with crypto,’” Cappella said.  

Both Cappella and Norfolk-St George are watching out for developments regarding Binance, but beyond the immediate concerns about their funds, they see the  overall future of crypto as bright. 

“My folks, they used to pay for their goods with either cash or check. I live in a world where I only either use my card or my phone, why would it be hard to believe that my son will be paying in crypto?” Norfolk-St George said.

DISCLOSURE

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