Binance Announces Latam Gateway As New Payments Partner, But Can It Escape Central Bank Rules? Understand

A little over a week after ending the partnership with Capitual, the Binance announced the Latam Gateway as the new payment partner of the brokerage cryptocurrencies (exchange) in Brazil.

“The integration process with Latam Gateway will be completed soon, when transactions (deposits and withdrawals) will be fully normalized,” writes Binance, in a press release, without stating exactly how long customers should wait.

Last Friday (17), Binance announced the end of its partnership with Capital and suspended withdrawals and deposits in reais. Since then, the broker has presented alternative solutions to customers, such as gift card cards and person-to-person transfers (peer-to-peer or P2P).

Who is Latam Gateway

Latam Gateway provides payment services in Brazil to global companies in different sectors, such as e-commerce, games and other aggregators of financial transactions.

The company was created in 2019 and will act as a bridge between investors and Binance. No further information was given about the company, other than what is written on Gateway’s own portal.

Remember the case: Binance and Capitual, the end of a story

Recently, the central bank required Access Bank — used by Capitual to connect users to Binance — to create “individual accounts” for customers, linked to just one CPF per user.

This method facilitates the identification of malicious transactions and is different from the system of “mother accounts”, with several registered CPFs, currently used. This was another of the BC’s measures to combat money laundering, one of the sensitive topics in the cryptocurrency market.

According to Capitual, the deadline for the individualization of accounts by Binance ended last Thursday (16). Since then, the company claims that the problems with the brokerage have been occurring since Friday (17).

Binance, but what about regulation?

The problems with Access Bank and Capitual started not for internal reasons between the two companies, but for a determination of the Central Bank itself for the payment institutions.

The monetary authority released a circular updating a measure to combat money laundering and digital crimes.

The deal with Latam Gateway should serve as a buffer as Binance migrates its operations to Sim;paul, a BC-regulated exchange acquired in March this year. We have contacted Gateway for a placement but have not received a response as of the completion of this article.

We also contacted Binance to clarify the broker’s compliance issues with the Central Bank’s determination. In a note sent to the report, the exchange states that it “acts in full accordance with the regulatory scenario in Brazil and in permanent dialogue with local authorities for the development of the sector in Brazil and in the world”.

Read Binance’s position in full below.

A poke from the ex

In a note sent to the press, Capitual reinforced its position that it follows the determinations of the Central Bank and that the end of the partnership was due to an inadequacy of Binance to the rules of the Brazilian monetary authority.

“The partner exchanges KuCoin and Huobi have adapted their systems to the changes that have taken place on the Capitual platform and the services provided to their users in transactions with reais happen regularly. In the case of Binance, there was no such adequacy”, states the company’s note.

Read the Capitual’s position in full below.

How is the chess of brokers in this scenario

Anonymous sources consulted by the report understand that what happened should not stop Binance from entering the national market. The exchange moves around $12 billion a day, according to Coin Market Cap, and has been investing in the country since late 2020.

But on the negative side of Binance’s balance is the fact that the exchange faces regulatory problems in other parts of the planet. In addition, there are occurrences of clients here in Brazil who had already complained about the broker’s lack of transparency.

This should further penalize Binance as local regulation advances. With this, a new chapter opens in the disputes between cryptocurrency brokers in the Brazilian market.

Binance Positioning

Binance informed that it operates in full accordance with the regulatory scenario in Brazil and in permanent dialogue with local authorities for the development of the sector in Brazil and worldwide, which includes the regulation of the segment.

The company also highlighted that today it announced the Brazilian Latam Gateway as its new payment partner, replacing Capitual, which no longer offers services to users since last week.

With the exchange, Binance will offer a better solution for clients as it conducts the process of acquiring local brokerage Sim;paul, a company authorized by the Central Bank and the Securities and Exchange Commission (CVM), announced in March.

Positioning of the Capital

Capitual informs that the services provided to the international exchanges with which it has a partnership are working normally, so the information that it interrupted operations for Binance is not valid. In response to a determination by the Central Bank, Capitual has worked in the last two months on adapting its technological platform to improve and individualize the process of verifying the identity of users for payments in Reais, with the objective of reinforcing controls and greater security in operations. involving cryptocurrencies.

This adjustment came into force on 6/16 and complies with the notification received by the Capital from its partner Banco Acesso, as determined by the Central Bank. The content is based on Circular No. 3,978/20 of the Central Bank, which provides for internal procedures and controls to be adopted by institutions aimed at preventing the use of the financial system for the practice of money laundering and terrorist financing crimes.

The partner exchanges KuCoin and Huobi have adapted their systems to the changes that have taken place on the Capitual platform and the services provided to their users in transactions with reais happen regularly. In the case of Binance, there was no such suitability.

Capitual bases its activities on compliance with legislation and requests from regulatory bodies and is committed to measures to combat money laundering and the financing of illicit activities in the cryptocurrency market. In this way, it understands that the requirements of regulatory bodies, such as the Central Bank, are mandatory for its operation and that of its business partners.