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What Is Binance Connect and Why Was It Shut Down?

Binance Connect, fiat-to-crypto on- and off-ramps service provider, was shut down on August 16, adding to the list of drawbacks for the group.

Binance connect

Binance Connect, formerly known as Bifinity, was launched in 2022. The Binance subsidiary was focused on fiat-to-crypto transfer and payment technology. The company was one of the few entities of the group operating in a regulated environment - it was registered in Lithuania, held the local Virtual Asset Service Provider license and complied with Anti-Money Laundering laws.

Binance Connect supported over 50 crypto assets and all major payment methods. It was processing transactions globally for users and other exchanges, had payments software and API solutions helping businesses to accept crypto payments. The company plan included a tailored checkout widget for NFT transactions.

In summer 2022 Binance integrated its Trust Wallet platform with Binance Connect to enable users to purchase crypto assets with credit or debit cards in it. Among other partners of Binance Connect were Beefy, a multichain yield optimizer, and Safe Pal, a cryptocurrency wallet.

Binance Connect was involved in Binance's attempts to enter the U.K. market. After the Financial Conduct Authority (FCA) prohibited Binance from trading in the U.K. in 2021, the group used Binance Connect (Bifinity at the time) to get control over a regulated local FinTech and circumvent the ban. However, the FCA discovered the scheme and reiterated its warning.

After about a year of operation, Binance decided to shut down its fiat on/off-ramps service without any preliminary notice. The information appeared on August 15 and according to the Notice of Service Termination, all Binance Connect services were terminated right away on August 16 due to 'strategic reasons'.

Interestingly, this information was tweeted by Biswap (BNB Chain-based decentralized exchange), while the Binance Connect blog and X (formerly Twitter) profile were last updated in September 2022, which could suggest the entity wasn't that active. No major reaction was observed on social media after the announcement which could also lead to the same conclusion. The most likely explanation is that the service was not financially successful.

Biswap also mentioned Binance Connect‘s provider closing the supporting card payments service.

The decision might have been provoked by Binance’s other ongoing troubles. The exchange is currently engaged in litigation with both the U.S. SEC and CFTC on allegations of operating an unlicensed exchange. It also faсed the departure of top executives, recently closed its Australian branch, and has had to leave multiple European markets due to legal issues.

Binance is the world's largest cryptocurrency exchange, which has maintained more than half of the spot trading market share since 2022. However, due to its recent problems, the market share dropped to around 40% this year, which combined with overall shrinking crypto trading volumes, led to a significant decrease in commission revenues. We will Observe if its team led by Changpeng Zhao (CZ) can handle this storm.