In response to increased regulatory scrutiny, Binance US, the U.S. affiliate of the popular crypto exchange Binance, announced that it would cease accepting dollar deposits and urged customers to withdraw their funds by Tuesday. The move follows a request from the U.S. Securities and Exchange Commission (SEC) to freeze Binance’s assets.
Binance US Informs Customers of Dollar Withdrawal Discontinuation
Binance US, which operates as an independent partner of Binance, took to Twitter on Thursday to inform its customers that its banking partners were preparing to discontinue dollar withdrawal channels as early as June 13. The SEC’s recent lawsuit against Binance, CEO Changpeng Zhao, and Binance.US’s operator marks a significant escalation in the regulatory crackdown on the crypto industry, with Coinbase also facing legal action from the SEC.
Highlighting its intention to transition into a “crypto-only exchange,” Binance US stated in the customer notice that it would no longer accept dollar deposits. It also strongly contested the SEC’s civil charges, deeming them “unjustified,” and vowed to vigorously defend itself against the charges.
Among the 13 charges levied by the SEC on Monday. Binance is accused of artificially inflating trading volumes, and diverting customer funds. Failing to restrict U.S. customers from accessing its platform. The SEC sought to freeze Binance’s U.S. assets through a federal court motion, which Binance US criticized as “unwarranted.” The company insisted that it had adequately addressed the SEC’s concerns regarding the safety of customer assets.
SEC Lawsuit Marks Escalation in Regulatory Crackdown on Crypto Industry
The SEC expressed skepticism regarding the control of customer assets held by Binance. US questioning whether they were under the direct influence of Binance or Changpeng Zhao. The SEC cited Zhao’s previous statements expressing a desire to circumvent compliance with U.S. law. According to the regulatory body, Binance and Zhao had unrestricted control over Binance US assets without adequate oversight or security measures.
Binance US currently holds over $2.2 billion in customer assets. Consisting of crypto and approximately $377 million in U.S. dollar bank accounts, according to the SEC.
Clara Medalie, the director of research at Kaiko, emphasized the severity of the situation for Binance US. As Americans are unable to utilize Binance Global. She described the inability of Binance.US to offer USD trading services in its intended market as an existential threat.