binance
The company is urging its customers to withdraw their US dollars just days after US regulators sued the company and its founder
Crypto firm Binance.US will suspend US dollar deposits as its banking partners prepare to shut down channels for withdrawing US dollars from exchanges, days after regulators sued Binance and its chief executive Changpeng Zhao.
The U.S. arm of the world’s largest crypto exchange said Thursday it was taking “proactive steps” in transitioning to a crypto-only exchange for now.
While trading, staking, and cryptocurrency deposits and withdrawals would remain fully operational, customers would not be able to deposit or withdraw US dollars from the exchange as “our payment and banking partners signaled their intent as early as June 13th to pause USD fiat channels.”, 2023”.
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Binance.US said it encourages its customers to “withdraw their U.S. dollars by June 13,” but warned that the withdrawal could take longer than usual to be processed due to the increased volume. The company emphasized that customer funds are “safe and available”.
Binance.US is an offshoot of Binance.com, a cryptocurrency exchange that, after launching in 2017, quickly grew into a company generating billions of dollars in revenue, primarily from transaction fees when customers bought and sold cryptocurrencies. Binance and other exchanges provided a key entry point into cryptocurrencies for many people, allowing assets like Bitcoin to be bought with “fiat” currencies like the US dollar.
Binance’s success made Zhao, also known as CZ, one of the richest people in the world on paper, and he was a key supporter of the crypto industry. Forbes this week estimated his net worth at $10.5 billion (£8.4 billion), although much of that wealth comes from his Binance holdings.
Regulators have been examining the characteristics of some digital assets for several years to decide whether they are in fact new versions of securities, such as stocks or bonds. Securities trading is strictly regulated in the major financial markets.
On Monday, the U.S. Securities and Exchange Commission (SEC), a financial regulator, accused Binance and Zhao of operating a “web of deception,” charging him and his exchange with 13 felonies, including violating U.S. securities laws and acting as a unregistered exchange.
A day later, the SEC filed a lawsuit against Coinbase, the largest US cryptocurrency platform.
The SEC has ramped up its crackdown on the crypto industry in recent months after the collapse of Bahamas-based FTX last year, whose founder, Sam Bankman-Fried, has now been charged with securities fraud, money laundering and other crimes.
According to an SEC court filing, U.S. regulators earlier Thursday said they favor freezing Binance assets.
In its statement, Binance.US accused the SEC of “extremely aggressive and intimidating tactics in pursuing an ideological campaign against the American digital asset industry.”
The company said this has created challenges for the unnamed banks it has worked with.
Binance.US states that it is an entirely separate exchange that operates separately from its parent company. However, one of the SEC’s key allegations is that Binance and Zhao failed to truly spin off the US company from the main exchange from which it was spun off.
The SEC claimed that Binance.US’ parent company was formed by Binance and Zhao to “knowingly circumvent US law while covertly controlling the operation of the Binance.US platform for their benefit,” according to one of the brief submitted to the supervisory authority.
The SEC claimed that Binance and Zhao had in fact “subverted their own controls to secretly allow high-volume US clients to continue trading on the Binance.com platform.”
Zhao has repeatedly and vigorously denied the wrongdoing. On Twitter, he retweeted a number of others’ criticisms of the SEC, and on Thursday night he retweeted Binance.US’ announcement of the suspension of dollar deposits.
Binance has stated that it “disagrees out of respect” with the allegations and that “any claim that user assets on the Binance.US platform have ever been compromised is simply false.”
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