EU Payment Rule Blocks Euro Deposits to Crypto Exchanges

The European Union's Instant Payments Regulation has introduced new requirements for euro payments, causing issues for investors who transfer euros to crypto exchanges. The regulation requires verification of payee, which matches the payee name against the IBAN before authorisation. This check often fails when transferring to a crypto exchange, as the account name is usually held by a settlement company or payment service provider.

The Verification of Payee procedure returns one of four results: match, close match, no match, or other. If there's no match, the payment is rejected. Some banks allow users to click through after a warning, while others abort the process.

Crypto exchanges often hold client money separately from their own assets, and the account name may not be the exchange's brand name. This discrepancy causes the Verification of Payee check to fail. To avoid issues, investors should carefully enter the payee name and IBAN when making a deposit.