Crypto Giant Binance Suspends Dollar Trading on U.S. Platform

by Wall Street Rebel - Michael London | 06/09/2023 9:10 AM

After being sued by the Securities and Exchange Commission this week, U.S. banks indicated they would no longer deal with the American office of Binance. In response, Binance has announced that it will cease the acceptance of U.S. dollar deposits.

After its banking partners severed ties with the company in reaction to a crackdown by federal authorities, the American branch of the massive cryptocurrency exchange Binance said late on Thursday that it would no longer let users trade on its platform using U.S. dollars. Binance is the world's largest cryptocurrency exchange.

This action significantly blows Binance US, the American branch of the biggest cryptocurrency exchange in the world. One of the most important things that an exchange does is make it possible for consumers to convert their fiat currency into digital currencies such as Bitcoin or Ether. This service will no longer be available to customers in the United States via Binance.

Binance.US informed its users in an email that the company was "taking necessary actions as we transition to a crypto-only exchange." During the last few days, the company said that its banking partners have communicated that they would no longer support the transfer of dollars into an off-Binance U.S. platform.

Binance and its chief executive officer, Changpeng Zhao, have accused the Securities and Exchange Commission (S.E.C.) of mishandling consumer cash and lying to authorities. The statement comes after the S.E.C. filed a lawsuit against Binance on Monday. In a second petition, the Securities and Exchange Commission requested that a federal court in Washington place a hold on assets associated with clients of Binance who are domiciled in the United States. The S.E.C. cited "the defendants' years of violative conduct."

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At the time of this writing, no response has been received from Binance's representatives despite a request for comment.

Since November, the crypto industry has been grappling with the weight of federal regulators following the FT.X. exchange's collapse, which triggered a widespread crisis across the sector. In the wake of its lawsuit against Binance, the Securities and Exchange Commission has taken further legal action by filing a distinct case against Coinbase, the preeminent cryptocurrency exchange in the United States. As the regulatory winds continue to shift, certain cryptocurrency enterprises have pledged to resist the crackdown, while others are charting courses to depart the United States altogether.

On Thursday, Binance.US conveyed a message to its esteemed clientele, revealing that it was grappling with the S.E.C.'s "extremely aggressive and intimidating tactics." In a recent announcement, the company declared the suspension of U.S. dollar deposits and implored its users to promptly withdraw any dollar funds they may have stored on the exchange before the 13th of June.

Simultaneously, the corporation endeavored to instill confidence in its clientele by affirming that their savings were fortified by funds securely held in reserve.

The message was unequivocal in asserting that a corresponding 1:1 reserve backed every customer asset. The sanctity of customer funds is an inviolable principle that we hold dear. We take great care to ensure that these funds remain impervious to any threat and are always accessible to our esteemed patrons.

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