Binance prepares to suspend US dollar funding after SEC crackdown
Binance.US said it will temporarily suspend US dollar deposits and provided customers with a deadline to withdraw their fiat balances. This decision comes after the US Securities and Exchange Commission (SEC) filed a lawsuit requesting the freezing of Binance’s assets in the country.
In a tweet on Thursday, Binance.US stated that its banking partners are preparing to cease dollar withdrawal channels in response to a crackdown by federal regulators, possibly as early as June 13. The American branch of the world’s largest crypto ecosystem also informed its users that it will no longer accept dollar deposits as it transitions into becoming a “crypto-only exchange.”
The development comes a day after Binance.US paused its over-the-counter trading portal and delisted several crypto tokens. The exchange, however, assured its users that deposits and withdrawals will continue to be available during this period.
In the customer notice shared on Twitter, Binance.US has characterized the SEC’s charges as “unjustified” and stated its intention to vigorously defend itself against them.
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
Even before the recent crackdown, Binance.US has been already struggling to find banking partners following the collapse of three banks that were known for working closely with the cryptocurrency industry.
The exchange has been left without banking services following the recent failures of US crypto-friendly banks, which forced the exchange to rely on middleman banks to store its funds.
The loss of direct banking relationships has made it more difficult for Binance.US to operate smoothly as it must now navigate a complex web of intermediaries to access the banking services it needs.
Binance.US has made several attempts to establish a direct banking relationship with banks such as Cross Riverbank and Customers Bancorp but were all in vain. The situation forced the exchange to hold its customers’ funds through the banking partners of the financial technology firm Prime Trust.
Earlier this week, the SEC has officially sought a restraining order to freeze the assets belonging to Binance in the United States. The filing, submitted to the U.S. District Court for the District of Columbia, was made just a day after the Securities and Exchange Commission initiated a lawsuit against Binance and its CEO Changpeng Zhao.
Binance.US stated that it considers the lawsuit filed against it to be baseless, and as a result, the exchange is prepared to defend itself in court and challenge all of the unfounded allegations. Binance.US asserts that, based on the available facts, the applicable law, and previous actions by the SEC, the regulator’s complaint lacks justification.
