Binance.US, the American arm of cryptocurrency exchange Binance, is set to face operational challenges as it announced that customers will no longer be able to utilize U.S. dollars to purchase cryptocurrencies on the platform starting from June 13.
The decision comes after Binance’s payment and banking partners expressed their intention to pause USD fiat channels, impacting the exchange’s ability to conduct business in the United States.
Binance revealed the change in a late-night Twitter announcement, attributing the development to the “unjustified civil claims” made by the Securities and Exchange Commission (SEC) against the exchange.
Binance stated that it had proactively disabled customers’ ability to buy and deposit U.S. dollars.The SEC’s scrutiny has primarily focused on Binance’s banking transactions, leading to a civil complaint filed against the exchange and its founder, Changpeng Zhao. The SEC alleges that both entities violated U.S. securities laws.Of particular concern to the SEC is Zhao’s influence and ownership of Binance’s U.S. and international arms.
The SEC’s emergency motion for a temporary restraining order sought to freeze U.S. dollars held by the exchange. However, with the recent developments, Binance’s banking partners have evidently decided to sever ties with the exchange, deeming it too risky to continue their collaboration.
The revelations emerging from the SEC case are said to have played a significant role in this decision.While customers will not lose their funds, the suspension of USD fiat channels means that they will need to find alternative methods for trading. It is suggested that customers could convert their funds into stablecoins like tether and then withdraw them to convert back to dollars on other platforms.
However, this move highlights the concerns raised by Binance’s banking partners and the weight of the SEC’s case against the exchange.Binance.US had previously disclosed several U.S. banking partners, including Axos Bank, Cross River Bank, and Silvergate, Signature, and Silicon Valley Banks (the latter three are reportedly defunct).
According to documents submitted to the SEC, these banking partners facilitated billions of dollars in transactions for the U.S. exchange. While multiple partners had already halted their services for Binance, it remains unclear which banking partners the exchange currently retains.
The suspension of USD fiat channels on Binance.US underscores the challenges faced by the exchange in the wake of regulatory scrutiny. It remains to be seen how Binance will navigate these obstacles and restore its operations to full functionality, ensuring continued service for its U.S.-based customers.
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