Banks have signaled that they will stop working with the company’s American branch, it said, after the Securities and Exchange Commission sued it this week.
The American branch of Binance, the giant cryptocurrency exchange, said late on Thursday that it would no longer allow customers to trade on its platform using U.S. dollars, after its banking partners cut the firm off in response to a crackdown by federal regulators.
The move is a major blow to Binance.US, the American arm of the world’s largest crypto exchange. One of the main functions of an exchange is allowing users to convert their traditional money into digital currencies like Bitcoin or Ether. Binance will no longer be able to offer that service in the United States.
In a message to customers, Binance.US said it was “taking necessary actions as we transition to a crypto-only exchange.” In recent days, the company said, its banking partners had signaled that they would no longer facilitate the movement of dollars on and off Binance.US’s platform.
The Securities and Exchange Commission sued Binance on Monday, accusing the firm and its chief executive, Changpeng Zhao, of mishandling customer funds and lying to regulators. In a separate filing, the S.E.C. asked a federal judge in Washington to freeze assets related to U.S.-based customers of Binance, citing “the defendants’ years of violative conduct.”
Representatives for Binance did not immediately respond to a request for comment.
The crypto industry has been under intense pressure from federal regulators since November, when the collapse of the FTX exchange set off an industrywide crisis. The day after it sued Binance, the S.E.C. filed a separate case against Coinbase, the largest American crypto exchange. Some crypto companies have vowed to fight the crackdown, while others are making plans to leave the United States entirely.
In its message to customers on Thursday, Binance.US said it was facing “extremely aggressive and intimidating tactics” from the S.E.C. The company said it was suspending deposits of U.S. dollars and urged users to withdraw any dollars they have been storing on the exchange by Tuesday.
At the same time, the company tried to assure its customers that their savings were backed up by money it holds in reserve.
“To be clear, we maintain 1:1 reserves for all customer assets,” the message said. “Customer funds are always safe, secure and available.”
David Yaffe-Bellany covers cryptocurrencies and financial technology. He graduated from Yale University and previously reported in Texas, Ohio, Connecticut and Washington, D.C.More about David Yaffe-Bellany
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As an expert in cryptocurrency and blockchain technology, my comprehensive knowledge in this field allows me to provide insights into the recent developments surrounding Binance and its American branch. I have a deep understanding of the technical, regulatory, and financial aspects of the cryptocurrency space.
First and foremost, the article discusses the decision by Binance.US, the American arm of the world's largest cryptocurrency exchange, to no longer allow customers to trade on its platform using U.S. dollars. This action comes in response to a crackdown by federal regulators, notably the Securities and Exchange Commission (SEC), which sued Binance and its CEO, Changpeng Zhao, accusing them of mishandling customer funds and providing false information to regulators.
The move by Binance.US is significant because it eliminates the ability for users to convert traditional fiat currency, such as U.S. dollars, into digital currencies like Bitcoin or Ether on the platform. This restriction is a consequence of the company's banking partners cutting ties with Binance.US due to the regulatory pressure.
The Securities and Exchange Commission's involvement highlights the increased scrutiny and regulatory challenges faced by the cryptocurrency industry. The SEC not only sued Binance but also filed a separate case against Coinbase, the largest American crypto exchange, indicating a broader regulatory crackdown on the industry.
The article mentions that Binance.US is undergoing a transition to become a "crypto-only exchange" in response to the challenges posed by the SEC and the severed ties with banking partners. The company assures its customers that their funds are secure and that it maintains 1:1 reserves for all customer assets. This move is reflective of the broader trend within the crypto industry, where some companies are vowing to resist regulatory pressure, while others are considering leaving the United States entirely.
In conclusion, my expertise in cryptocurrency allows me to dissect the nuances of the Binance situation, shedding light on the technical, regulatory, and financial implications for both the company and the broader cryptocurrency industry in the United States.
Due to government regulations, the full Binance website is unavailable in the US, and prohibits US residents from creating an account. However, Binance US offers 150+ cryptocurrencies, so it's a good option for traders residing in the US.
While Binance.US no longer supports USD services, you can open an account with another trusted platform that allows you to buy crypto with USD. Be sure to choose a platform that allows you to transfer crypto into and out of the platform. Then, simply deposit the crypto you purchased to Binance.US.
Binance.US Will Suspend Deposits & Withdrawals of USDC via the TRON Network (TRC20) Following Circle's announcement that it will discontinue support for USDC on the TRON blockchain, Binance.US will suspend deposits and withdrawals for USDC via Tron (TRC20) after March 30, 2024 at midnight PDT / 3 a.m. EDT.
Binance officially blocks access from IP addresses located in the United States, but "potential customers would be taught how to evade geographic restrictions", Forbes claimed.
Binance.US is available to most U.S. residents, unlike parent company Binance. But there are some restrictions. The exchange isn't available in Alaska, American Samoa, Hawaii, Maine, New York, the Northern Mariana Islands, Texas, the U.S. Virgin Islands and Vermont.
The lawsuit from the Commodity Futures Trading Commission (CFTC) said the firm cultivated US business while failing to register properly with authorities. It accused Binance of breaking numerous US financial laws, including rules intended to thwart money laundering.
Binance was part of an "extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law," according to an SEC press release. Meanwhile, the DOJ investigated Binance for criminal activity and filed criminal charges in November 2023.
There will be no option for cashing out in US currency. To withdraw dollars, users must first convert their funds to another digital asset or stablecoin. Binance US notified users of the update via email and provided detailed instructions for the new procedure.
Binance is exiting the US, but it isn't going away
Binance.US is a subsidiary of Binance that was created in 2019 to “to serve U.S. consumers and adhere to U.S. regulations,” according to a post on the site.
If you're looking for more advanced features and the ability to trade crypto for other cryptocurrencies, then the Crypto.com Exchange is the way to go. This platform offers a wider variety of trading options and potentially better rates for frequent traders, especially those who hold CRO, Crypto.com's native token.
To make $100 a day, you would need a large and active referral network. Binance occasionally offers educational campaigns where users can learn about specific cryptocurrencies and earn small amounts of those cryptocurrencies as a reward. While the earnings are not typically substantial, they can accumulate over time.
However, a VPN hides your IP address and replaces it with an IP address from another country by rerouting it through that country's servers. So, by choosing an IP address from any country that is supported by Binance.com, you can access Binance from anywhere in the world, including the US.
After a move to shut down the exchange fell through—Binance.US CEO Brian Shroder was the lone board member to vote against a shut down, which needed a unanimous decision to liquidate Binance.US—and sale talks with Gemini and sovereign wealth funds fell through, Zhao might just let the company fall on its own.
Cryptocurrency exchange giant Binance faces federal charges for fraud and money laundering. Binance has been under scrutiny for years, with federal investigations dating back to 2018.
On February 22, Onanuga confirmed that the government had ordered telecommunications companies and other internet service providers to block access to crypto trading platforms including Binance.
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Introduction: My name is Cheryll Lueilwitz, I am a sparkling, clean, super, lucky, joyous, outstanding, lucky person who loves writing and wants to share my knowledge and understanding with you.
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