In a noteworthy turn of events, Binance.US, an established branch of the world’s biggest cryptocurrency exchange, Binance, is undergoing significant alterations. This shift comes as a result of the company’s banking collaborators severing ties in response to heightened scrutiny from federal authorities. Consequently, Binance.US has announced that it will halt U.S. dollar trades on its platform, a change that will undoubtedly disrupt its operations.
The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry. https://t.co/AZwoBOgsqS and our business partners have not been spared in the use of these tactics, which has created… pic.twitter.com/rlIe6swIoY
— Binance.US 🇺🇸 (@BinanceUS) June 9, 2023
Banking Partners Pull Out
Cryptocurrency exchanges primarily serve as a conduit for transforming traditional currencies into digital equivalents, such as Bitcoin or Ether. Unfortunately, with its banking allies opting out, Binance.US will be unable to provide this crucial service in the United States. The company, in a recent communication to its users, disclosed its plans to evolve into a crypto-only exchange following the unfortunate withdrawal of banking support for dollar transactions.
Regulatory Legal Battle Intensifies
This major development trails on the heels of a lawsuit filed by the Securities and Exchange Commission (S.E.C.) against Binance on Monday. Allegations levied against the firm and its CEO, Changpeng Zhao, include improper handling of client assets and deceitful practices towards regulators. Additionally, the S.E.C. has requested a federal judge in Washington to freeze assets linked to Binance’s U.S. clientele, pointing to a history of regulatory infractions by the defendants.
Implications for the Crypto Industry
Notably, the cryptocurrency sector has faced increased federal oversight since the collapse of the FTX exchange last November, triggering an industry-wide downturn. The S.E.C. escalated the pressure the day after suing Binance by filing a case against Coinbase, America’s largest cryptocurrency exchange. In the face of this crackdown, some crypto enterprises are preparing to leave the U.S., while others remain steadfast in their opposition.
Binance.US’s Assurance Amid the Crisis
In the midst of these hostile encounters with the S.E.C., Binance.US announced the suspension of U.S. dollar deposits and urged its users to withdraw their dollar holdings by June 13. Meanwhile, the company is working to ensure its customers that their savings are protected by reserves. Binance.US asserts that it maintains a 1:1 reserve ratio for all customer assets, thereby promising that client funds are always safe, secure, and accessible.
