Binance.US users left in limbo after fiat withdrawal suspension
Binance.US has updated its financial protocols in response to increasing regulatory scrutiny, halting all direct US dollar withdrawals from its platform. The move, announced in a recent update to their terms of service, compels users to convert US dollars to stablecoins or other digital currencies prior to making a withdrawal.
This development comes on the heels of the suspension of dollar deposits earlier this summer. The exchange attributed the decision to the U.S. Securities and Exchange Commission’s (SEC) intensified approach, which made their banking partners concerned about further engagements with the crypto sector.
Earlier in June, Binance.US said it will temporarily suspend US dollar deposits and provided customers with a deadline to withdraw their fiat balances. This decision came after the SEC filed a lawsuit requesting the freezing of Binance’s assets in the country.
A notable point in this shift is that US dollar deposits are no longer backed by the Federal Deposit Insurance Corporation (FDIC), marking a divergence from conventional financial protections.
For Binance.US customers, this means adjusting to a new modus operandi for fund access. The straightforward action of directly withdrawing US dollars is no longer available. Instead, users will need to convert their USD holdings into stablecoins or other digital assets for withdrawal purposes. To mitigate potential confusion, Binance.US has taken steps to elucidate this revised procedure to its clientele through email communications.
While regulatory challenges have undeniably played a pivotal role in the exchange’s operational amendments, Binance.US’s woes extend beyond just the SEC’s actions. The firm’s banking partners, alarmed by the SEC’s aggressive stance, were hesitant to maintain ties.
The exchange also faced multiple lawsuits related to its transactions, which compelled the platform to reevaluate its services. As a result, it suspended dollar deposits earlier this summer, which was a precursor to the current suspension of dollar withdrawals.
Binance.US stated that its banking partners are preparing to cease dollar withdrawal channels in response to a crackdown by federal regulators. 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.”
Binance.US also 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.