- Binance faced consequences as Israel-Palestine conflict tensions lead to the closure of cryptocurrency accounts.
- US regulators allege links between Binance and Hamas, adding to the exchange’s challenges.
Binance [BNB], one of the largest players in the cryptocurrency exchange realm, weathered a tumultuous year marked by legal entanglements, executive departures, and external pressures. The challenges for Binance escalated as tensions flared in the Israel-Palestine region, adding a layer of complexity to its already complicated year.
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The troubles pile on
According to a report by the Financial Times, Israeli law enforcement authorities took significant action by ordering the closure of dozens of cryptocurrency accounts. They also seized millions of dollars’ worth of digital assets.
This move was a part of their ongoing efforts to sever any connections between cryptocurrency markets and Hamas, especially following the attack on their country.
It was reported that more than 100 accounts on Binance, were closed since the commencement of Hamas’s assault on 7 October. Furthermore, authorities were actively pursuing information on up to 200 additional cryptocurrency accounts.
Binance, in response, confirmed that it has blocked a small number of accounts while asserting its adherence to internationally recognized sanctions regulations. However, the company offered no additional comments on the situation.
Adding to the woes, financial regulators in the United States raised allegations that funds held on Binance had links with Hamas in the past.
A lawsuit filed by the Commodity Futures Trading Commission (CFTC) against the exchange in March brought these allegations to the forefront. It was claimed that senior Binance executives received information related to Hamas transactions back in 2019.
Low volumes plague the exchange
The mounting challenges faced by Binance have significantly impacted the exchange’s trading volume in recent months. Traders and investors have been cautious due to the uncertainty surrounding the platform.
Moreover, Binance’s woes extended to the United Kingdom. At the time of writing the firm had to bar new UK users from availing its services.
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The reason behind this action was the Financial Conduct Authority (FCA)’s recent regulatory changes that came into effect on 8 October. These rules stipulated that non-registered cryptocurrency platforms must collaborate with an FCA-authorized entity for marketing purposes.
Initially, Binance partnered with Rebuildingsociety.com Ltd (REBS) to fulfill this requirement. However, on 10 October, REBS lost its rights to approve financial promotions. This forced Binance to halt new registrations in the UK as a result.