To regain access to a steady flow of dollars, Binance.US, the American arm of the cryptocurrency exchange, has teamed up with MoonPay, a payment startup.
Binance.US has faced numerous legal and financial challenges recently, with multiple banking partners cutting ties with the platform, leaving customers unable to deposit or withdraw dollars. The partnership with MoonPay will provide an alternative way for Binance.US users to convert dollars to cryptocurrency.
MoonPay, known for its high-profile brand partnerships focused on nonfungible tokens, will allow Binance.US customers to use their debit or credit cards, Apple Pay, or Google Pay to buy Tethers, a stablecoin. They can then use the stablecoin to purchase other crypto tokens available on the platform. The option to use MoonPay is immediately available to customers, according to an email by Binance.US viewed by Bloomberg.
MoonPay CEO Ivan Soto-Wright emphasized that his company follows all regulatory rules and performs know-your-customer compliance checks for users from Binance.US. This move comes as Binance.US faces legal action from the U.S. Securities and Exchange Commission (SEC), which sued the exchange and its global affiliate, Binance.com, for alleged securities law violations. Binance.US has seen a decline in market share and liquidity since the lawsuit, leaving it as a marginal player compared to U.S. rivals Coinbase Global Inc. and Kraken.
MoonPay, based in Miami, raised $555 million in funding and has backing from celebrities such as Ashton Kutcher and Justin Bieber, according to Bloomberg.
The crypto industry as a whole is facing a fundamental challenge, with regulators around the world increasing their scrutiny of crypto companies. The SEC’s charges against Binance and its founder, Changpeng Zhao, allege illegal servicing of American customers, inappropriate control of client assets, and disregard for compliance and anti-money laundering standards. Binance has also faced a lawsuit from the Commodity Futures Trading Commission (CFTC), which claims the company was operating in violation of the Commodity Exchange Act.
The ongoing legal woes of Binance and other crypto companies highlight the industry’s identity crisis. The industry’s reputation as a lawless Wild West of digital innovation has drawn in many enthusiasts, but regulators are now cracking down on questionable practices.