The Binance logo is displayed on a screen in San Anselmo, California, June 6, 2023.
Justin Sullivan | Getty Images
Binance.US customers will no longer be able to use U.S. dollars to buy crypto on the platform as early as June 13, hobbling the exchange’s ability to do business in the U.S., after both payment and banking partners “signaled their intent to pause USD fiat channels,” the exchange said.
Binance announced the change late Thursday night on Twitter and blamed the U.S. Securities and Exchange Commission’s “unjustified civil claims against our business.” The exchange said it had preemptively disabled customers’ ability to buy and deposit U.S. dollars.
Binance’s banking transactions are the center of immense scrutiny by the SEC, which filed a civil complaint against the exchange and its founder, Changpeng Zhao, alleging both violated U.S. securities laws.
Zhao’s influence over and ownership of the U.S. and international arms of Binance — an international network of offshore holding companies the SEC alleges have moved billions of dollars of assets between themselves — prompted the SEC to file an emergency motion for a temporary restraining order. That restraining order would have frozen U.S. dollars from the exchange anyway.
Customers won’t lose their money. Those who haven’t withdrawn their money by the shutdown date could still theoretically convert it to a stablecoin such as tether, then withdraw that and convert it back to dollars elsewhere. But it suggests Binance’s banking partners have decided the exchange is too risky a client to keep on, and that the revelations from the SEC case have grown too significant to ignore.
The exchange’s disclosed U.S. banking partners, which have included Axos Bank, Cross River Bank and the failed Silvergate, Signature and Silicon Valley Banks, processed billions of dollars in transactions for the U.S. exchange, according to documents Binance provided to the SEC. Multiple banking partners had already stopped serving Binance and it wasn’t immediately clear which banking partners Binance retained.