Binance.US Halts Dollar Deposits and Withdrawals Amid Regulatory Pressure

US Cryptocurrency Exchange Faces Banking Challenges and SEC Lawsuit

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Binance.US cryptocurrency exchange, announced last Thursday that it will stop deposits in US dollars and also, its users will not be able to withdraw dollars from the exchange after US regulators said they will seek a freeze on Binance’s assets in the US.

Binance’s US subsidiary officially announced that its banking partners are preparing to shut down its dollar withdrawal channels, starting June 13.

Binance.US said in the notice sent to its customers that it will no longer accept dollar deposits as part of its plans to become a “cryptocurrency-only exchange”. Binance, as is its custom, did not provide details of who its banking partners are.

Case in point

As a reminder, last Monday, the US Securities and Exchange Commission (SEC) sued Binance, its founder and CEO Changpeng Zhao, and its US exchange operator.

The lawsuit marked a dramatic escalation in the US regulators’ effort to crack down on the cryptocurrency industry, with the SEC also suing the most prominent US cryptocurrency exchange, Coinbase (COIN.O), a day later.

The SEC accused Binance of artificially inflating its trading volume, sending customer funds elsewhere, failing to restrict US customers from using Binance.com and misleading investors about market surveillance controls.

The SEC last Tuesday asked a federal court to freeze Binance’s assets in the US. Binance.US called the move “unjustified”, saying it had addressed the SEC’s concerns about the safety of customer assets.

The operations remain in place

Last Thursday Binance.US said that cryptocurrency trading, deposits, withdrawals and “staking” would remain fully operational.

“The suspension of withdrawals will obviously create or cause a lot of concern and panic,” said Matthew Dibb, COO of Singapore’s cryptocurrency platform, Stack Funds.

Cryptocurrency prices barely reacted to this negative news, with Bitcoin trading near $26,500. It was headed for a weekly loss of about 2.3%, after falling to a two-month low of $25,350 earlier in the week.

Binance’s BNB currency, the world’s fourth-largest, fell 1.5%.

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