- Binance Uganda set to shut its doors next week.
- Binance CEO, CZ, says closure of BinanceUG is part of a “business decision.”
After a two-long year stay in operations, Binance Uganda, one of the African outposts for the world’s largest crypto exchange, will be shutting its doors on November 11. The closure follows a mission by Binance to cut down on losses, which also sees British Isle-based exchange, Binance Jersey, shut down its businesses on November 30th.
The East African country has enjoyed the exchange’s services from the fall of 2018, offering a direct platform for Ugandans to use the Shilling to purchase cryptocurrencies. The launch of Binance UG targeted efforts to promote crypto adoption across the continent, using the country as a starting point to taking over the African market.
Why Binance UG is shutting down
In an interview explaining the recent closure of the Ugandan branch, Binance CEO, Changpeng “CZ,” Zhao explained it as a “business decision.” He further claims the platform is a loss-making center for the larger Binance.com firm as it does not “generate enough revenue to be profitable.”
However, the closure of the Ugandan and Jersey exchanges raised qualms on Binance relationship with regulators – as explained in a Forbes article. The article accuses the exchange of “conceiving of an elaborate corporate structure designed to intentionally deceive regulators and surreptitiously profit from crypto investors in the United States.”
However, CZ dismissed the FUD claiming that Binance only operates where regulators have offered a license. As the issue with regulators is set to rise once more following Binance UG closing down, CZ explained,
“Some people misinterpreted that as maybe we got into trouble with the regulator locally or something. And that’s not the case.
We do have good relationships with regulators in both areas that we have an exchange winding down. It’s just a business decision.”
Moreover, Binance.com launched support for deposits and withdrawals of the Ugandan shilling, which duplicates the functions of Binance UG. With most users switching to the main Binance platform and more services offered on it, the need for a local crypto platform does not make sense.
“All the features that Binance Uganda provides [are] now covered by Binance.com together with our fiat channel partners,” CZ said. “There’s a very minimal number of users on there, so it doesn’t make sense for us to maintain two platforms.”