Binance.US Halts USD Withdrawals Amid Regulatory Pressure
In response to escalating regulatory pressures, Binance.US has officially announced a temporary halt to all USD withdrawals, effective immediately. This move comes amidst growing concerns over Binance’s legal compliance within the United States. The decision to suspend USD withdrawals is expected to remain in place for the foreseeable future.
The cryptocurrency exchange notified its users of these significant changes via email, outlining new requirements for Binance.US customers. Under the updated terms, customers must first convert their USD holdings into stablecoins or other digital assets before being eligible to withdraw their funds. Additionally, the updated terms indicate that USD deposits are no longer insured by the Federal Deposit Insurance Corporation (FDIC).
— Ryuushi (@_electronicCash) October 17, 2023
Binance has been grappling with various regulatory challenges in the United States for a considerable period. The platform has faced lawsuits regarding its presence in the country, and recent developments have forced the platform to suspend certain withdrawal services. This follows a prior announcement in late June when Binance.US warned users that USD withdrawals might not be available for much longer.
“While USD withdrawals continue to operate normally on our platform, we anticipate that our banking partners may discontinue this service in the near future,” Binance.US stated.
The exchange further encouraged its users to “use, withdraw, or convert their USD into stablecoins to continue trading cryptocurrencies.”
These developments come against the backdrop of ongoing legal troubles for both Binance and Binance.US. On June 5, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance, listing a total of 13 allegations. One of the key accusations in the lawsuit alleges that funds from Binance and Binance.US were co-mingled in an account controlled by the company Merit Peak Limited, affiliated with Changpeng Zhao.
Another accusation states that Binance.US engaged in money laundering through a secretive Market Maker (MM) known as Sigma Chain, also owned by CZ. As a result, the SEC filed a motion in court requesting the freezing of Binance.US’s assets.
This legal battle sent shockwaves through the crypto market, causing significant turbulence. Binance.US also began facing difficulties as it delisted over 100 trading pairs from its Advanced Trading interface and discontinued its OTC services. Furthermore, the prices of BTC, ETH, and BNB on Binance.US began deviating from the global market averages.
Initially, the SEC had proposed freezing all of Binance US’s assets, but the two parties ultimately reached an agreement on this matter.
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