Some Binance EU Users Find Fiat Withdrawals Cut Off Even Before Paysafe Ends Service

Binance says Paysafe gave it short notice that a “very small portion” of European users will be subject to an earlier closure before the payments provider officially pulls support for the exchange on Sept. 25.

AccessTimeIconSep 19, 2023 at 3:20 p.m. UTC
  • A small proportion of Binance’s European users are unable to withdraw euros well ahead of the exchange’s regional payments provider Paysafe pulling support.
  • Binance says it was given short notice by Paysafe on early account closures for select clients, while the latter claims Binance is responsible for customer-facing issues.

Some Binance customers in the EU are blocked from withdrawing euros from the platform as a change in the crypto exchange’s regional payments provider looms.

Paysafe, Binance’s European payments partner, is set to end support for the exchange’s customers on Sept. 25. But several users in the region have been shut out from accessing the service well ahead of the deadline.

One, Ervin Ursic Kovac told CoinDesk that he’d sent some ether (ETH) to his account on Sept. 12 and sold it for euros, but was unable to withdraw the currency, and was instead greeted with a pop-up message that his account had been closed early with no prior warning. He had been able to withdraw euros on the previous day without issue, Ursic Kovac said.

“As a high-frequency Paysafe service user, Paysafe closed your account early to speed up this process. Any remaining EUR/GBP in your account can be withdrawn once the review is completed,” the message titled “Paysafe Notification” said.

Binance told CoinDesk on Monday that Paysafe had put a “very small portion” of users through an “earlier closure review.”

In a Friday statement to CoinDesk, Paysafe said it “cannot speculate in the media on why this particular customer is unable to make transactions and it is Binance who holds the relationship with the customer not Paysafe.”

The statement added that Paysafe services for Binance customers “are fully operational with our contractual and regulatory obligations.”

Paysafe did not respond to a Monday request for comment on why it had targeted certain accounts for early closure.

Ending support

Paysafe facilitated fiat deposits and withdrawals for Binance users in Europe, including via bank transfer in the EU’s Single Euro Payments Area (SEPA). In June, the payments provider said it will no longer offer its embedded wallet to Binance’s EU customers following a “strategic review” of the partnership. The move came after Paysafe pulled support for the British pound for new Binance users in May.

The crypto exchange has been facing increased regulatory scrutiny worldwide following last year’s market meltdown that revealed mismanagement of customer funds and regulatory arbitrage in several high-profile crypto enterprises – most notably at Sam Bankman-Fried’s FTX.

Binance is also retreating – or in some cases, being made to retreat from – several European countries including Belgium and Austria over regulatory issues as it prepares to comply with the EU’s Markets in Crypto Assets (MiCA) rules coming into effect next year.

Early closure reviews

Paysafe will delay withdrawals for targeted users like Ursic Kovac until their accounts are reviewed, a spokesperson for Binance said in an emailed statement, adding that around 0.085% of Binance users with Paysafe accounts in Europe are affected.

Nothing had changed in the week that followed, Ursic Kovac said in a Monday email. “The worst part (besides not being able to control my own assets) is of course the price changes of ETH – because I am not able to buy it back, Binance is directly costing me money,” he said.

Binance said it was “very disappointed” with Paysafe’s short notice on the move to temporarily block some users.

“We're actively working to speed up the return of funds from Paysafe to all affected users. We will notify users immediately through the Binance app, along with a follow up email, once Paysafe informs us that reviews are complete,” the spokesperson said, adding that affected users have been offered VIP upgrade vouchers.

Ursic Kovac said on Tuesday that he had not received a VIP upgrade offer yet.

Screenshot of Paysafe account review notification. (Ervin Ursic Kovac)
Screenshot of Paysafe account review notification. (Ervin Ursic Kovac)

Krisztian Sandor contributed reporting.

Edited by Nikhilesh De and Sheldon Reback.


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Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.

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