Binance To Be Cut Off From US Banking Days After It Claims User Assets Are “Safe And Secure”
Binance.US, the American unit of the world’s largest cryptocurrency exchange, announced that as of June 13, U.S. dollar deposits will be suspended, and the exchange’s banking partners are preparing to pause fiat dollar withdrawal channels. This move comes just days after Binance and its CEO Changpeng Zhao were sued by U.S. regulators, causing ripples of concern throughout the crypto community.
Taking it to Twitter, Binance.US revealed that it is taking “proactive steps” in its transition to becoming a crypto-only exchange, temporarily. However, the exchange assured its customers that trading, staking, as well as deposits and withdrawals in cryptocurrencies, will remain fully operational.
“As a result, in an effort to protect our customers and platform, today we are suspending USD deposits and notifying customers that our banking partners are preparing to pause fiat (USD) withdrawal channels as early as June 13, 2023. We encourage customers to take appropriate action with their USD,” the firm said in a tweet.
The legal troubles for Binance began earlier this week when the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against both the exchange and its founder.
This was swiftly followed by a lawsuit against Coinbase, the largest cryptocurrency platform in the United States. These actions signal a significant escalation in the crackdown by U.S. regulators, reminiscent of the FTX incident that unfolded last year.
In an interesting development, U.S. financial regulators expressed their support for freezing Binance’s assets, as revealed in a U.S. SEC filing to a federal court.
“Binance.US is a considerably smaller business than their international group. Halting of withdrawals is obviously going to create or spur quite a bit of worry and panic,” said Matthew Dibb, COO of Singapore crypto platform Stack Funds. “But day after day for the last week, Binance has been hit with various types of comments and issues from the SEC and regulators, so this was really to be expected.”
The suspension comes merely days after Binance.US sought to reassure its users that their assets would remain secure, and the platform would continue its normal deposit and withdrawal operations.
Surprisingly, the cryptocurrency market’s reaction to the news has been subdued, with bitcoin only marginally lower at $26,496 during the Asian trading session on Friday. It is worth noting that bitcoin is on track for a weekly loss of approximately 2%, after hitting a two-month low of $25,350 earlier in the week due to mounting nerves surrounding the SEC’s crackdown.
Meanwhile, Binance’s BNB token experienced a minor slide of 0.46%, settling at $261.46. Tony Sycamore, a market analyst at IG Markets, observed the muted response and suggested that the market may not have fully grasped the situation yet.
Binance.US made its stance clear in a tweet, describing the SEC’s approach to cryptocurrency as “extremely aggressive and intimidating.” The exchange vowed to vigorously defend itself, its customers, and the industry against what it deems as “meritless attacks” by the SEC.
“The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry. Binance.US and our business partners have not been spared in the use of these tactics, which has created challenges for the banks with whom we work,” Binance added.
In the aftermath of the lawsuits, the crypto industry has been highly critical of U.S. SEC Chair Gary Gensler. However, Gensler has refuted claims that the agency is attempting to crush the crypto industry, despite the ongoing regulatory scrutiny.
As the crypto community braces itself for further developments, one thing remains certain: the landscape of the cryptocurrency market is changing, and the consequences of these legal battles are yet to fully unfold.
Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
