Crypto exchange giant Binance stopped allowing SEPA transfers on July 6th. This development comes on the heels of increasing regulation issues that have rocked the company in recent weeks. Binance has long had regulation issues with countries like the United States and the U.K.
Last month, the U.K. Financial Conduct Authority (FCA) had announced Binance was not allowed to conduct any regulated activities in the country.
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The suspension of SEPA transfers comes only a day after megabank Barclays had announced it was stopping transfers to the exchange. SEPA transfers are the preferred method for users who are in the EU.
iDEAL And SEPA Suspension
About a month ago, Binance had announced that they were temporarily disabling the iDEAL payment option. iDEAL is a convenient option used by Dutch users to fund their accounts instantly. The payment method enables customers to pay through their own bank directly to the exchange.
Customers had expected this to just be a temporary ban. But so far, the option has not been restored and users cannot use it. In a now-deleted notice on the Binance website, the crypto exchange had advised customers to use the SEPA method of transfer. This was also a convenient option. Albeit a slower one for Dutch customers.
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Now, the SEPA suspension announced yesterday has users on edge. According to Binance, customers could still deposit Euro on the exchange using credit and debit cards. But then, it did not address the concern of moving large amounts of Euro to the exchange.
SEPA transactions usually come with a 0% fee on the side of the crypto exchange and the user side. But credit and debit card deposits carry a 1% to 3% charge on transactions.
Large cash movements also done with cards have a higher probability of being flagged by banks. And hence, leading to further delays in funding accounts in order to buy crypto from Binance.
How This Could Affect The Crypto Market
Binance is the largest crypto exchange in the world. This means that a lot of investors are moving their cash in and out of the exchange. Removing such vital options for depositing cash for 27 Euro countries could have negative effects on the market.
A large number of euros coming into the crypto market will be halted from this move. As people will not want to use their debit and credit cards to carry out large transfers on the exchange. Most bank cards also come with purchase limits. This puts the customers at a disadvantage if they wish to deposit more than their card limit allows.
Removing easy ways for investors to deposit money could easily deter people from wanting to get into crypto. News like this always carries negative connotations in the market. People start to doubt the authenticity of the exchanges and crypto-assets. And so, this leads to people not wanting to risk putting their money in the market.
This move could very well spell a bear market for the crypto space.
Featured image from CoinDesk, chart from TradingView.com