Image source: cointelegraph.com
News of Binance Card Termination
Binance sent emails to users in the EEA, European Economic Area, announcing that the Binance Visa cards will stop working on December 20th.
As a Binance Visa Card owner in the EEA, this took me by surprise and I investigated further to understand the reasons and implications of this decision. The main reason for this discontinuation due to changes in regulatory requirements in the EEA. To put this in context it is important to note that the European Economic Area (EEA) is a regulatory area that consists of the 27 member states of the European Union (EU) plus Iceland, Liechtenstein, and Norway. So the EEA has a power and authority when it comes to regulatory requirements that affect crypto exchanges. Here follows some of the rigorous regulations the EEA enforces to the T.
- The Markets in Crypto-Assets Regulation (MiCA): MiCA is a piece of EU legislation that will create a harmonized regulatory framework for crypto-assets in the EEA. MiCA is expected to be adopted in 2023 and will come into force in 2024. MiCA will require crypto exchanges to obtain a license from a national regulator, comply with anti-money laundering and counter-terrorist financing (AML/CFT) rules, and protect customer assets.
- The Fifth Anti-Money Laundering Directive (5AMLD): 5AMLD is a piece of EU legislation that requires crypto exchanges to comply with AML/CFT rules. 5AMLD requires crypto exchanges to conduct customer due diligence (CDD) on their customers, report suspicious transactions to the authorities, and maintain records of their transactions.
- The General Data Protection Regulation (GDPR): The GDPR is a piece of EU legislation that regulates the processing of personal data. The GDPR applies to crypto exchanges that collect and process personal data from their customers. Crypto exchanges must comply with the GDPR by obtaining consent from their customers to collect and process their personal data, and by taking steps to protect their customers' personal data from unauthorized access, use, or disclosure.
In addition to these EU-level regulations, there are also a number of national-level regulations that affect crypto exchanges in the EEA. For example, the German Banking Act (KWG) requires crypto exchanges to obtain a license from the German Federal Financial Supervisory Authority (BaFin). Further south in Spain, a proposal from the Spanish Stock Market Regulator (“CNMV”), which has been granted to regulate the aggressive advertisement of cryptocurrencies. All in all, it is accurate to note that the regulatory landscape for crypto exchanges in the EEA is complex and evolving.
With What EEA regulation did Binance not comply?
Image source:decrypto.co
The short and direct answer to this million Bitcoin question is Binance has not publicly stated why its Visa Card is being discontinued in the EEA nor has the EEA publicly announced the reason. In the email I received it answered the question in a Q&A format as follows:
Why will I no longer be able to use my Binance Visa Debit Card?
UAB “Finansinės paslaugos ,,Contis“ will no longer be the issuer of the Binance Visa debit card program after the closing date.
Having mentioned that, one can only suspect and extrapolate from the above stated regulations and infer that Binance did not comply with one or more of the regulations. I repeat the real and specific reason is not publicly known. Nonetheless my guess is that Binance Visa might not comply with the Markets in Crypto-Assets Regulation (MiCA). Since MiCA is expected to be adopted in 2023 and come into strict force in 2024, Binance could have decided to cease issuing and use by clients. MiCA will require crypto exchanges to obtain a license from a national regulator, comply with anti-money laundering and counter-terrorist financing (AML/CFT) rules, and protect customer assets. As of my writing now, Binance does nothave licenses from national regulators of the EEA. It has stated though, that it is working to obtain licenses in a number of jurisdictions. Concerning the Fifth Anti-Money Laundering Directive (5AMLD), Binance complies.
How Binance complies with Fifth Anti-Money Laundering Directive (5AMLD):
Binance conducts customer due diligence (CDD) on its users which is in accordance with the Fifth Anti-Money Laundering Directive (5AMLD) as explained above. The process by Binance to comply with CDD process includes collecting personal information from its users, such as their name, address, date of birth, and nationality. Binance also verifies the identity of its users by requiring them to submit copies of their government-issued ID. Every verified Binance user goes through this process, and I can personally attest that I couldn't deposit, transfer or trade - basically enjoy Binance services without this verification as a public user. In addition to CDD, Binance also conducts know your business (KYB) on its corporate users. KYB is a process of verifying the identity and business activities of a company.
Next Steps for Binance Visa Card Holders like perhaps You and Me in EEA:
First of all, it is important to note that Binance accounts are unaffected and continue to operate as usual. As practical advice Binance advises us to destroy our Binance Visa debit cards by cutting by through the chip and magnetic stripe. No other action is required as Binance assures us as users in the EEA with Binance Visa Cards that we will not lose any FIAT or crypto currencies from our Binance accounts. To be prudent, I would not use the Binance Visa card for any purchases from now on if I were a user in the EEA to avoid any issues like merchant or purchase claims when the termination comes into effect. This is because through Binance confirms that refunds, disputes and complaints will continue to be processed as usual this is until the Binance Visa Debit Card program is closed and for the mandatory period thereafter. However, better safe than sorry. If you still want to use the card before December 20th but have some difficulties, you can contact Binance Customer Service for assistance via the Binance.com website and for complaints contact the Binance team via the Binance live support chat at https://www.binance.com or in the Binance app.
Concluding thoughts:
I liked using my Binance Visa card...It was great while it lasted because it allowed me to use my Crypto and also enjoy cashback benefits. In my case, and perhaps for many others it is a way to live and experience the FIAT and Cryptocurrency systems simultaneously. As an alternative the Crypto.com * Visa Card can be a good option as it can be used to make purchases anywhere that Visa is accepted in the EEA and other parts of the world.
The Crypto.com * Visa Card offers a number of benefits, including:
- No annual fee
- Up to 8% cashback on purchases
- Free ATM withdrawals
- Interbank exchange rates
- Crypto rewards
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So as a user and consumer, you still have choices and options.
REMEMBER, this is not Financial Advice. Do your due diligence and consult with relevant and certified professionals.
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