Binance suspends payments in Brazilian real
Binance will temporarily suspend real-based direct deposits and withdrawals from one of its key payments networks in Brazil, it said in a blog post explaining the situation to users.
The world’s largest cryptocurrency exchange said that it will switch from its current payment partner to provide a better solution for customers while driving the acquisition process. Specifically, Binance will replace its current partner Capitual with a local payment provider to be announced soon.
Binance was also reportedly planning to buy banks and payments processors in Brazil as a way into the market. It has already signed a memorandum of understanding to potentially acquire Brazilian securities brokerage firm, Sim;paul Investimentos. However, the takeover requires Binance to get approval from both the Securities and Exchange Commission of Brazil (CVM) and the Central Bank of Brazil.
“Binance will promote a smooth transition in the coming weeks and that it is taking all necessary steps, including legal related to Capitual, to ensure that users are not adversely affected by the change,” it added.
Citing the new requirements imposed by the Central Bank of Brazil, Capitual said it had to cut ties with Binance as the exchange failed to comply with the new rules. The Brazilian bank, which also provides payments services for other exchanges, said Kucoin and Huobi have adapted their systems to the changes. As such, they remain operational on the Capitual platform, and their customers can continue their transactions with reais regularly.
Under the previous laws, crypto exchanges and other businesses serving as middlemen can provide the data on their clients voluntarily, but after the new legislation was introduced, they can’t refuse or appeal the authorities’ requests to turn over information.
Having entered the local market in 2019, Brazil is one of a few countries where Binance has set up a physical office. However, a group of local brokerage firms lodged a complaint against the exchange back in March accusing it of operating illegally in the country.
Nasdaq-listed crypto exchange operator Coinbase is also in talks to acquire Brazilian unicorn 2TM Group, the holding company for Latin America’s largest crypto exchange, MercadoBitcoin.com.
Both firms didn’t share the financial details of the acquisition, but 2TM was valued at roughly $2.2 billion in December after the latest $50 million fund-raise.
Headed by Daniel Cunha, 2TM is the second Latin American crypto-focused unicorn after Bitso and its subsidiary Mercado Bitcoin counts nearly 3.5 million customers. Per its own statistics, trade volume at the crypto exchange hit $7 billion last year, surpassing its total for the first seven years. The Brazilian firm raised $250 million in two financing rounds in 2021, led by Japan’s SoftBank Group Corp.