Binance.US, the U.S. wing of the global cryptocurrency exchange Binance, is facing serious difficulties after a lawsuit filed by the U.S. Securities and Exchange Commission (SEC). The most recent indication suggests the exchange might soon end its relationships with banking partners in the U.S.
Binance.US Shifting to Cryptocurrency-Only Exchange
Binance.US recently announced through a screenshot of an email shared on its official Twitter account that its banking and payment partners plan to suspend U.S. dollar channels from June 13th. The exchange declared that it would halt U.S. dollar deposits as of today. On the other hand, they disclosed plans to transition to a cryptocurrency-only exchange soon.
In its tweet, Binance.US accused the SEC of waging an “ideological campaign” using “extremely aggressive and intimidating tactics” against the U.S. cryptocurrency industry. The exchange stated its decision to temporarily suspend U.S. dollar fiat channels is meant to protect its customers from excessive regulatory actions:
Our customers are always our priority. We are taking these proactive steps as we transition to a cryptocurrency-only exchange for a while. To be clear, we have a 1:1 reserve for all customer assets. Delays in withdrawals may arise due to high demand and the fact that banks will be closed over the weekend. Moreover, all cryptocurrency trading, staking, investing, and withdrawal operations are fully functional.
Binance Facing Serious Challenges Globally
After the SEC lawsuit, Binance globally is in a tough spot as well. The U.S. regulator has also requested the court to freeze Binance’s assets in the U.S., alleging the risk of absconding. Indeed, the court greenlit this request, temporarily freezing Binance’s U.S. assets. The legal process has progressed faster than expected and appears not to be in Binance’s favor.
In addition to the U.S. market, Binance also faced issues in Australia. Following an investigation by the Australian Securities and Investment Commission (ASIC), Binance Australia suspended all Australian dollar deposit operations in April. This occurred after the loss of many of its banking partners in Australia.
Whether all these actions will cause issues in other global jurisdictions where Binance operates remains uncertain. However, even as the world’s largest cryptocurrency exchange, it could potentially face a significant liquidity crunch.
