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Transition to Digital Assets
Binance.US announced changes to its terms of use, prohibiting direct dollar withdrawals. The updated terms now dictate that customers seeking to withdraw U.S. dollar funds must first convert them to stablecoins or other digital assets. Following this conversion, the resulting digital assets can be withdrawn from the platform.
Binance.US's decision to suspend U.S. dollar deposits and withdrawals is not without context. It had previously notified its users in June that U.S. dollar deposits would be halted and USD withdrawals would no longer be processed. The exchange urged customers to withdraw their dollars by a specified date as it prepared to transition into a crypto-only trading platform.
The impetus behind this strategic pivot can be traced back to a lawsuit initiated by the U.S. Securities and Exchange Commission (SEC) against Binance.US, its international counterpart Binance, and its CEO, Changpeng "CZ" Zhao.
The lawsuit, filed on June 5, alleged that the entities had been operating unregistered securities platforms. In addition, the SEC's inquiries about the company's custody practices and its level of cooperation with legal requests have further complicated matters.