Withdrawing funds: Binance's Achilles heel

Complicated day for Binance users in Europe. Since this morning, thousands of them have been unable to withdraw their funds from the exchange platform. Some have even had their accounts purely and simply suspended without further explanation. "It's as if I had no money left in my account," one platform customer told The Big Whale, corroborating testimonies reported by our colleagues at BFM Crypto.

The problem is linked to Paysafe, Binance's payment service provider (PSP). In particular, Paysafe enables the platform to carry out SEPA transfers and therefore allows its European users to withdraw their euros.

This type of player is an essential link in the chain between crypto exchange platforms and the traditional world. Without the intervention of these companies, users are unable to make crypto/legal currency conversions (euro in particular).

Binance had announced this summer that Paysafe had decided to end their collaboration from 25 September, forcing it to urgently find a new partner, which the company has clearly failed to do.

"We are very disappointed by the short notice given by Paysafe and understand how frustrating this is for the users concerned. We are actively working to expedite the return of Paysafe funds to all affected users," explained a company spokesperson.

Also according to Binance, Paysafe is reportedly in the process of subjecting a very small portion (0.085%) of its users "to an early closure review". As a result, the service provider is delaying "withdrawals for the users concerned", adds the company, which stresses that Paysafe has agreed to continue the partnership while a solution is found. At this stage, euro withdrawals are still unavailable.

Withdrawals of legal tender such as euros or dollars is a recurring headache for the largest platform on the planet, which regularly has to change them. In August, Binance lost another PSP, Switzerland's Checkout, which also decided to give up.

"Binance manages to convince partners to work with them because there is a lot of volume involved, but soon enough they realise that the complexity of the flows is very difficult to manage," explains a person close to the company. Investigations targeting Binance and pressure from regulators are also working against Binance "Some people don't want to take too many risks by working with a company on the radar of the authorities", adds an industry insider.