Banks to cut off Binance access to U.S. banking system, exchange says
Binance.US customers will soon no longer be able to use U.S. dollars to buy cryptocurrency on the platform, as both payment and banking partners have “signaled their intent to pause USD fiat channels,” said the exchange. The change is expected to take effect as early as June 13, and it will significantly affect the exchange’s ability to operate in the United States.
In a late Thursday night announcement on Twitter, Binance blamed the move on the Securities and Exchange Commission’s “unjustified civil claims against our business.” The SEC filed a civil complaint against the exchange and its founder, Changpeng Zhao, alleging that they have violated U.S. securities laws.
Binance’s banking transactions have become the center of immense SEC scrutiny. The agency filed an emergency motion for a temporary restraining order against the exchange, which would have frozen U.S. dollars from the exchange. Customers will not lose their money, but Binance’s banking partners have decided the exchange is too risky a client to keep on, and the revelations from the SEC case have grown too significant to ignore.
FAQs about Binance and the SEC case
What is Binance?
Binance is a cryptocurrency exchange founded in China in 2017. It has become one of the world’s largest cryptocurrency exchanges, with a daily trading volume of more than $5 billion.
What are the Securities and Exchange Commission’s allegations against Binance?
The SEC filed a civil complaint against Binance and its founder, Changpeng Zhao, alleging that they have violated U.S. securities laws. The agency alleges that Zhao’s influence over and ownership of the U.S. and international arms of Binance prompted the exchange to move billions of dollars of assets between offshore holding companies, which violated U.S. securities laws.
What does the suspension of USD fiat channels mean for Binance and its customers?
Binance.US customers will no longer be able to use U.S. dollars to buy cryptocurrency on the platform, which will significantly affect the exchange’s ability to operate in the United States. The move is expected to take effect as early as June 13, and it suggests that Binance’s banking partners have decided the exchange is too risky a client to keep on.
Will Binance’s customers lose their money?
Customers will not lose their money. Those who haven’t withdrawn their money by the shutdown date could still theoretically convert it to a stablecoin such as tether, then withdraw that and convert it back to dollars elsewhere.
Exchange claims that banks will terminate Binance’s access to the U.S. banking system
Binance.US customers will no longer be able to purchase cryptocurrencies using U.S dollars on the platform as early as June 13th, after both payment and banking partners signaled their intention to pause USD fiat channels. This latest development is expected to limit the exchange’s capacity to conduct business in the United States. Binance announced the change late on Thursday on Twitter and attributed it to the Securities and Exchange Commission’s “unjustified civil claims against our business.” The exchange said it had preemptively prevented customers from buying and depositing U.S dollars. The SEC has been closely scrutinizing Binance’s banking transactions, and it recently filed a civil complaint against the exchange and its founder, Changpeng Zhao, for violating U.S securities laws. The SEC believes that Zhao’s influence on and ownership of Binance’s U.S and international arms, which are a network of offshore holding companies that moved billions of dollars of assets between themselves, necessitates an emergency motion for a temporary restraining order. Although customers who still have money in the platform will not lose it, they may opt to convert their funds into tether stablecoin and withdraw it before converting them back to dollars elsewhere. Binance’s banking partners have decided that the exchange is too risky to continue working with, and the SEC case disclosures have become too critical to ignore. According to the documents provided to the SEC, Binance’s banking partners, which include Axos Bank, Cross River Bank, and failed banks such as Silvergate, Signature, and Silicon Valley Banks processed billions of dollars in transactions for the exchange. It is not yet clear which banking partners Binance will retain.