suspension of US dollar deposits

The American branch of the most important exchange in the crypto market, Binance, has taken drastic measures to deal with its legal disadvantages. Take effect, Binance.US announced it all US dollar deposits will be suspended with immediate effect. In addition, the exchange urged customers of its US platform to take the necessary measures as soon as possible, as its “banking partners prepare to suspend fiat (USD) withdrawal channels from June 13, 2023“. Any remaining USD assets may be subject to a conversion to stablecoins.

The statement also warns that customers may face downtime in processing their requests. This possibility is all the more likely as large amounts of withdrawals expected as most banks close their doors this weekend.

In a Twitter post, Binance.US claimed that United States Securities and Exchange Commission had chosen to use “aggressive and intimidating tactics”. The stock exchange also added that the regulator’s ideological campaign against the crypto industry had significantly affected its activities and partners. Earlier has difficulties of Binance to find a banking partner had been highlighted by several media outlets.

This latest decision follows another action taken by the exchange. In fact, Binance.US completed yesterday deletion of several trading pairs on its platform. Most of them are linked to USDT stablecoin, Binance’s original stablecoin BUSD and Bitcoin.

A transition to a simple crypto exchange platform

The statement also mentioned that the company plans to limit its activities to a crypto exchange. Therefore, cryptocurrency trading, bets, deposits and withdrawals should remain fully operational. Binance also assured that their clients’ assets would always be maintained at a 1:1 ratio.

As part of this litigation, the SEC had also requested an order to freeze assets of entities linked to Binance.US. These include assets belonging to BAM Management US Holdings And BAM Trading Servicesthe holding and operating companies of Binance.US.

The SEC said that the implementation of this measure should be accelerated to ensure the safety of customer assets and prevent their loss. The supervisory authority mentioned the defendant’s violations, such as evasion of regulatory oversight and deficiencies in the custody and control of client assets. In the charges filed against Binance, the SEC in particular alleged for which Binance had authorized two affiliated companies Changpeng Zhao, Sigma chain And Merit Peak, to access “billions of US dollars” of client funds held by BAM Trading. For its part, Binance has declared to user funds on Binance.US had never been at risk.

Regardless of the outcome of this lawsuit, observers believe that the SEC’s action could push players in the crypto sector towards more industry-friendly jurisdictions, such as Dubai, Singapore or Hong Kong. At the same time, the SEC cases are significantly eroding American citizens’ confidence in crypto.

Leave a Comment