On August 25, Bloomberg reported that Mastercard is ending its card partnership in Latin America with the global cryptocurrency platform, Binance. This move mirrors a decision made by Visa in July, when the company stopped issuing new co-branded cards with Binance in the European region, according to Bloomberg.
Visa and Mastercard’s decisions mark another setback for Binance’s ambition to penetrate the mainstream market. This comes at a time when Binance is experiencing growing estrangement from the conventional financial system.
Visa has remained silent on its decision, but it’s evident that traditional financial institutions are proceeding with caution when collaborating with the exchange.
In Latin America, the situation becomes even more intricate. Binance recently announced the cessation of its crypto debit card services in both the Middle East and Latin America, effective from August 25.
This decision was made public in response to a query on Twitter regarding an issue with a Binance Card in Colombia. Even with the suspension in place, Binance emphasized that this move only affects less than 1% of its user base in the aforementioned regions.
Binance has been increasingly under the spotlight due to heightened regulatory scrutiny globally. Adding to this, Cuscal, an Australian banking partner, terminated its collaboration with Binance. This resulted in the halt of deposits and withdrawals of Australian dollars using PayID.
“Cuscal maintains stringent due diligence, onboarding, and compliance standards for our clients, as well as any associated customers or merchants. We have, and will persistently, end relations with any client, customer, or merchant failing to meet our exacting criteria.”
Binance has recently come under the scrutiny of U.S. regulatory bodies including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Both agencies have lodged legal complaints against the exchange and its CEO, Changpeng “CZ” Zhao, accusing them of breaches related to securities regulations and granting unauthorized access to U.S. users. However, Binance has refuted these allegations, stating:
“Zhao’s stated ‘goal’ was ‘to reduce the losses to ourselves, and at the same time to make the U.S. regulatory authorities not trouble us.’”