Global payments company Mastercard is looking to dissolve its crypto card payment partnership with Binance. As a result, all four crypto card programs in Argentina, Brazil, Colombia, and Bahrain will be terminated by September 22.
Probable Cause for the Mastercard Deal Termination
Binance is yet to issue a comment, however, in the early hours of Thursday, its customers’ support account on Twitter (now known as X) posted that the Binance Card “will no longer be available to users in Latin America and the Middle East.”
The reason behind the sudden decision was not disclosed but it is suspected to be related to the current regulatory challenges which Binance is facing in the United States.
The US Securities and Exchange Commission (SEC) sued the leading exchange in June over the alleged violation of U.S. Securities laws. About 13 charges were levied on Binance and its Chief Executive Officer (CEO) Changpeng ‘CZ’ Zhao. The cryptocurrency exchange allegedly operated illegally in the United States, mishandled customers deposits, misled regulators and investors and listed unregistered securities.
Cardano (ADA), Polygon (MATIC) and Solana (SOL) were some of the tokens listed as unregistered securities in this case. At first CZ claimed to not have seen the official complaint. However, the exchange later responded to the regulator, stating that it was disappointed in the SEC but would definitely contest the allegations in court.
In Binance’s opinion, the U.S. regulator opted for enforcement and litigation instead of choosing a thoughtful, nuanced approach required by the dynamic and complex nature of the technology.
“While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis. We intend to defend our platform vigorously,” Binance explained.
SEC Lawsuit Impacts Negatively on Binance
At the time, the enforcement action impacted negatively on the broad crypto ecosystem. Prices of tokens began to drop drastically. The effect of this SEC lawsuit are yet to wear out as perceived in this Mastercard crypto card partnership termination.
Notably, the news comes seven months after the offering was launched in Brazil. It was only in January when Mastercard and Binance announced the launching of crypto cards in the Latin American country.
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