Resolving USD Withdrawal Woes: Binance.US Unveils Temporary Solution with a Note of Caution

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Binance.US has informed its customers of an impending halt to fiat (USD) withdrawal channels as early as June 13 and has announced the suspension of US dollar deposits.

On June 9, Binance.US declared that the Securities and Exchange Commission’s “extremely aggressive and intimidating tactics” had compelled them to act. The business also said it intended to switch to a cryptocurrency-only exchange while keeping a 1:1 ratio for client funds.

However, the notification did provide a warning that any delays in processing withdrawals “may be the result of elevated volumes and weekend bank closures.” It also confirmed that cryptocurrency trading, staking, deposits, and withdrawals are still fully functional.

The company stated that it has suspended USD deposits to safeguard its clients and platform. In addition, Binance.US is “notifying customers that our banking partners are preparing to pause fiat (USD) withdrawal channels as early as June 13, 2023.”

More Details on the Announcement

The June 9 announcement by Binance.US reads, “The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry. http://Binance.US and our business partners have not been spared in the use of these tactics, which has created challenges for the banks with whom we work.”

Reminder: As we transition to a crypto-only exchange, https://t.co/gM6e3xb9BX will remove select USD Advanced Trading pairs from our platform on 6/26 at 8 p.m. PDT / 11 p.m. EDT.

While USD withdrawals remain fully operational, we encourage you to use, withdraw, or convert your… pic.twitter.com/LWDWVvwtoq

— Binance.US Customer Support (@BinanceUShelp) June 22, 2023

In its latest customer update on June 22, the purportedly autonomous Binance subsidiary stated that its system is still fully functional and that U.S. dollar withdrawal requests are anticipated to resume processing within five business days. It also urged any clients who had unsuccessful withdrawal requests to resubmit their requests, while issuing a warning that the relief would not last indefinitely.

As it transforms into a crypto-only exchange, Binance.US is also pushing its users to “use, withdraw, or convert your USD to a stablecoin to continue crypto-to-crypto trading.”

The company notified that any remaining USD balances in client accounts could be converted into Tether crypto later. More USDT trading pairs were also disclosed, with the addition of ANKR, DAI, DASH, HBAR, ICX, IOTA, RVN, WAVES, XNO, XTZ, and ZIL on June 26.

Binance.US also made clear that the majority of “USD Advanced Trading pairs” would be taken off the platform. Only a few of the 150 cryptocurrencies supported by Binance.US will be able to be traded against the US dollar: BTC, ETH, ADA, BNB, LTC, MATIC, SOL, VET, USDC, and USDT.

The business has also experienced issues with Australian banking partners. When local banking and payment partners ceased their services in May, there was a rush to sell and cash out, and Bitcoin prices on the Australian branch of Binance plunged to a 20% discount.

Binance.US vs the SEC

Regulators have been evaluating various digital assets’ characteristics for some years to see if they are fresh iterations of securities like stocks or bonds or not. The largest financial markets have strict regulations governing the trading of securities.

Binance.US is a subsidiary of Binance.com, a cryptocurrency exchange that quickly expanded into a business with billion-dollar profits, primarily from transaction fees from users buying and selling cryptocurrencies. For many users, Binance and other exchanges served as a crucial point of entry into cryptocurrencies by enabling them to purchase assets like bitcoin using “fiat” currencies like the US dollar.

Zhao, often known as CZ, became one of the world’s richest persons on paper as a result of Binance’s success, and he has long been a vocal supporter of the cryptocurrency sector. This week, Forbes estimated his net worth to be $10.5 billion (£8.4 billion), however a large portion of that wealth comes from his ownership of Binance.

Reminder: As we transition to a crypto-only exchange, https://t.co/gM6e3xb9BX will remove select USD Advanced Trading pairs from our platform on 6/26 at 8 p.m. PDT / 11 p.m. EDT.

While USD withdrawals remain fully operational, we encourage you to use, withdraw, or convert your… pic.twitter.com/LWDWVvwtoq

— Binance.US Customer Support (@BinanceUShelp) June 22, 2023

The US Securities and Exchange Commission (SEC), a regulatory body for the financial industry, charged Zhao and Binance recently with running a “web of deception” amidst 13 other offences, including breaking the US Securities Act and operating as an unregistered exchange. A day later, the largest crypto exchange platform, Coinbase, was the target of another complaint from the SEC.

Why is Binance Under Such Scrutiny?

Following the collapse of the Bahamas-based FTX last year, whose creator, Sam Bankman-Fried, has now been charged with securities fraud, money laundering, and other offences, the SEC has intensified its investigation into the cryptocurrency business in recent months.

According to Binance.US, its parent business does not have any influence over the operation of the exchange. One of the key claims made by the SEC, however, is that Binance and Zhao were unable to separate the US company from the primary exchange from which it was spun off.

In a brief submitted by the regulator, the SEC said that Binance and Zhao created the parent company of Binance.US with the intent to “knowingly circumvent US law while secretly controlling the Binance.US platform’s operations for their benefit”.

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