- USD deposits in Binance US wallets are no longer protected by FDIC insurance
- Binance suspended USD deposits in early June, citing SEC's "extremely aggressive tactics"
Following a recent update to Binance US’ terms of use, clients of the exchange’s US arm are no longer allowed to withdraw dollars directly from the platform. They have to convert their USD to stablecoins or another cryptocurrency if they want to withdraw USD from their accounts.
In addition, USD deposits in Binance US wallets are no longer protected by the Federal Deposit Insurance Corporation’s (FDIC) insurance.
Exchange cited regulator’s intimidating tactics
Binance suspended USD deposits in early June, citing the US Securities and Exchange Commission’s (SEC) “extremely aggressive and intimidating tactics” against companies in the crypto sector. As a result of the SEC’s approach, banks have become reluctant to engage with the crypto sector.
The exchange’s US arm warned users that its banking partners were ready to pause dollar withdrawals in mid-June.
Regulatory woes
The SEC sued Binance, the firm’s US arm, and its founder and CEO Changpeng “CZ” Zhao in June for allegedly selling and trading in unregistered securities in the form of thestablecoin BUSDand the Binance Coin (BNB) token. The regulator also accused the exchange of violating securities laws through its staking service.
Since then, the SEC has questioned the company’s willingness to cooperate in legal matters and its custody practices.
Operational problems in Europe
Binance also lost its euro payments partner, Paysafe. At the end of September, the exchange urged Paysafe users to convert their euros toTether (USDT)before the end of October.
Binance stopped UK signups
Binance recently stopped new users from registering in the UK. The decision was made after a UK regulator, the Financial Conduct Authority (FCA), imposed new restrictions on Binance’s UK promotions partner. These strict measures curtailed Binance’s advertising and promotions, significantly limiting its impact on the local market.
The watchdog’s crackdown reflects an international trend of more stringent measures toward cryptocurrency exchanges.
