Binance.US has halted direct US dollar withdrawals from its platform. This change follows a series of regulatory actions by the US Securities and Exchange Commission (SEC). As a result, Binance.US' users are now required to convert their US dollar holdings into stablecoins or other digital assets for withdrawal.
This decision was revealed in the exchange's updated terms of use, which took effect yesterday (Monday). Previously, US dollar deposits in Binance.US user wallets were protected by FDIC insurance. However, under the new terms, this safeguard is no longer applicable.
"Your accounts and digital assets are not eligible for FDIC insurance protection," the crypto exchange indicated. "In the event you wish to withdraw US dollar funds from your account, you may convert such US dollar funds to stablecoins or other digital assets, which can subsequently be withdrawn."
Binance.US' Regulatory Standoff
In June, the US affiliate of the global crypto exchange Binance suspended USD deposits, accompanied by a notification to its customers regarding the impending pause of fiat withdrawal channels. Theexchange cited its intentions to safeguard its customers and the platform amidst growing regulatory concerns.
The background to this move is the ongoing legal battle between Binance.US, its international parent company Binance, and its Founder, Changpeng Zhao, against the SEC. On June 5, the SEC filed a lawsuit alleging that these entities and Zhao operated unregistered securities platforms.
Binance.US, in a message to its users, cited the SEC's "extremely aggressive and intimidating tactics" as the reason behind suspending dollar deposits. This regulatory pressure made its banking partners wary of engaging with the cryptocurrency sector. Furthermore, Binance.US warned that its banking partners were preparing to pause dollar withdrawals as early as June 13.
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
Navigating Cryptocurrency Regulations
Binance.US announced the suspension of its OTC Trading Portal services in June. Additionally, the exchange delisted ten crypto trading pairs associated with Bitcoin and Binance USD from its platform. Notably, several of these pairs experienced significant declines in value following the SEC's legal action. This delisting significantly reduced the number of trading pairs on the crypto exchange.
In September, the SEC escalated its ongoing legal battle with Binance.US, urging a court in Washington, DC, to grant permission for a comprehensive examination of the exchange's asset custody services. This development comes as the regulator intensified its claims that Binance.US has been uncooperative in providing requested documents.
This article was written by Jared Kirui at www.financemagnates.com.
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