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Binance.US updated its terms of use to inform its customers that the direct withdrawal of USD is unavailable but they can convert to the supported stablecoins or other digital assets to facilitate seamless transfers.
The ongoing crypto regulatory scrutiny in the United States to prevent another FTX instance has pushed the existing digital asset exchanges including Binance.US to a tight corner. On Tuesday, Binance.US updated its terms of use to inform its customers that the United States dollar withdrawals are not available anymore as the banking partners have suspended the services. However, Binance.US noted that other withdrawals including stablecoins and digital assets will continue to operate normally, hence allowing the affected customers to convert their USD seamlessly. With the terms of use going into effect immediately, the crypto exchange highlighted that customers who do not comply with the new changes can close their accounts anytime.
Notably, Binance.US stressed that all digital assets on its platform are not eligible for insurance protection under the Federal Deposit Insurance Corporation (FDIC). Moreover, the cryptocurrency exchange does not hand a banking license to operate in the county and the SEC has continued to indicate that most crypto firms have been listing unregistered securities.
The move by Binance.US was, however, not surprising as the crypto exchange has been caught up in regulatory scrutiny by several agencies in the United States. Moreover, the regulatory agencies are trying to avoid another blowout like the FTX and Alameda Research where billions of dollars were stolen or misused.
In mid-June, Binance.US announced the suspension of USD deposits on its platform and encouraged customers to withdraw their dollars or convert to digital assets.
The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry. https://t.co/AZwoBOgsqS and our business partners have not been spared in the use of these tactics, which has created… pic.twitter.com/rlIe6swIoY
— Binance.US 🇺🇸 (@BinanceUS) June 9, 2023
What Next for Binance.US and Market Outlook
With Binance.US already facing several charges including commingling customers’ assets with corporate funds, and operating an illegal exchange, the firm has vowed to fight for its rights and the entire crypto industry. Moreover, many cryptocurrency exchanges are finding it challenging to obtain an operating license from the relevant United States government agencies. Additionally, there is a notable demand for digital assets by institutional investors as demonstrated by the recent spot Bitcoin and Ethereum ETFs.
Meanwhile, Binance.US faces a possible settlement with the US SEC similar to Kraken for offering unregistered securities sale offers. Nonetheless, the outcome of the Binance.US case depends on several factors including a ruling on the ongoing SEC vs Ripple lawsuit that could be reciprocated to all other digital assets that are suspected of violating securities laws.
Notably, the SEC has lost several cases against the crypto industry including the Grayscale Investments one, hence rejuvenating hopes for a clear regulatory framework in the United States in the near term. Moreover, the United States Congress has expedited its crypto regulatory review process in the past year.