Binance US, the American arm of the popular cryptocurrency exchange, is facing a series of setbacks. Following the recent lawsuit filed by the US Securities and Exchange Commission (SEC), Binance US has announced the suspension of USD deposits and impending suspension of fiat (USD) withdrawal services.
These developments have raised concerns among users and industry experts, shedding light on the aggressive tactics employed by the SEC and their impact on Binance’s banking partners.
The recent legal battle between Binance US and the SEC has taken a new turn, as the exchange suspends USD deposits with immediate effect.
This move comes in response to the regulatory pressure faced by Binance US and its banking partners. In a message to its customers, Binance US notified them of the upcoming suspension of fiat withdrawal services, scheduled to take effect as early as June 13.
The exchange emphasizes that this suspension only affects Binance US users and will not impact the international trading platform.
However, the inability to withdraw US dollars will transform Binance US into a crypto-only exchange, limiting its functionality as a fiat on/off ramp.
Binance US is urging its customers to take necessary action with their USD funds before the withdrawal services are suspended.
The SEC’s aggressive and intimidating tactics have been cited as the primary reason for these suspensions. The regulatory body’s ideological campaign against the US digital asset industry has presented significant challenges for Binance.US and its banking partners.
It appears that the SEC’s pressure has coerced Binance US’s remaining banking partners to cease cooperation to avoid regulatory scrutiny.
Consequently, Binance US will lose a vital feature – the fiat on/off ramp – leaving it to operate solely as a cryptocurrency exchange. Despite this setback, the exchange assures its customers that all other features will remain intact.
Binance US emphasizes its commitment to customer safety, assuring users that all customer assets are backed by 1:1 reserves.
While processing withdrawals may experience delays due to high volumes and weekend bank closures, the exchange’s trading, staking, and deposits and withdrawals in cryptocurrency will continue to operate without interruption.
The Binance US team pledges to vigorously defend against the SEC’s unfounded attacks and work towards fostering a thriving market for digital assets in America.
However, it is clear that, for now, the SEC holds the upper hand. According to insider information obtained by FOX Business reporter Eleanor Terrett, the SEC’s actions can be attributed to their intimidation tactics within the banking sector.
The motive behind the SEC’s approach has raised questions among industry experts. Adam Cochran, a partner at venture capital firm Cinneamhain Ventures (CEHV), took to Twitter to express his concerns.
Cochran questions how suspending USD deposits and withdrawals would protect users and its relevance to the ongoing SEC case, which primarily concerns the assets on the exchange.