Key Points
- Binance.US to suspend deposits and withdrawals in USD as banking partners sever ties with them.
- Binance CEO CZ has clarified that Binance.US deposits have never mixed with the funds in the international exchange.
- SEC seeks a restraining order to freeze Binance.US funds to prevent asset flight
Banks are severing ties with Binance.US after SEC charges
More pain for Binance.US customers as banks have decided to move away from the exchange in light of the SEC court battle. They have withdrawn their services of powering the Binance USD fiat ramp, making it impossible to withdraw or deposit USD to the exchange anymore.
Following the developments, Binance.US has announced that it will suspend the deposit and withdrawal of funds from the exchange via USD on June 13, 2023. The exchange is in a court battle with the Securities and Exchange Commission after the regulator filed 13 charges against it on June 5, alleging that it was operating as an unlicensed securities broker.
The SEC is particularly interested in the bank transactions of Binance and Binance.US, where it believes that the exchanges and their founder Changpeng Zhao were violating U.S. securities laws. SEC alleges that Zhao’s influence over the two exchanges has led to the movement of billions between them, attracting their interest. However, Binance CEO, CZ does not accept the allegation clarifying that funds from the two exchanges were never mixed.
The SEC has now filed a motion to grant a restraining order against Binance.US, alleging that the exchange could be used to transfer U.S. customer deposits offshore. While this motion has yet to be granted, the withdrawal of banking institutions from the exchange has led to the immediate need for the closure of the USD fiat ramp as the exchange no longer has a way to serve the demands of its U.S. customers.
However, customer deposits won’t be lost even if they are late in transferring their money. They can still convert it to assets like tether stablecoin and transfer it to other exchanges or crypto wallets. Keep watching Fintech Express for updates on crypto regulation and other Fintech-related stories.