Binance, one of the world’s largest cryptocurrency exchanges, is facing a new wave of regulatory challenges as banks cut off fiat on-ramps for its US dollar deposits. The move comes amid a lawsuit filed by the US Securities and Exchange Commission (SEC) against Binance and its CEO Changpeng Zhao for allegedly violating securities laws.
Binance.US, the US affiliate, announced that it will suspend US dollar deposits starting June 9, 2023. The move comes as its banking partners plan to disrupt US dollar withdrawal channels. since June 13, 2023.
The company said the decision is part of its efforts to protect its clients and the platform amid “extremely aggressive and intimidating tactics” by the SEC, which sued Binance and its founder Changpeng Zhao for violating securities laws.
The Exchange Remains Positive Despite Current Climate
Binance.US assured that client funds are “safe, secure, and available” and that cryptocurrency services “remain fully operational.“ Customers can withdraw their US dollars until June 13 but be warned that the process may take longer than usual due to high volume.
The suspension of US dollar deposits is a major blow to Binance’s liquidity and reputation, as it reduces its access to one of the most important markets for crypto trading. Binance has been trying to expand its presence in the US market by launching a separate platform called Binance.US, which operates under a different legal entity and complies with local regulations.
Binance and its CEO have denied any wrongdoing and vowed to fight the SEC’s allegations in court. They argue that their tokens are not securities, but rather utility tokens that have a legitimate use case on their platform. They also claim that they have been cooperating with regulators and seeking clarity on the legal status of their products.
The crypto community has been divided on how to respond to the SEC’s aggression, with some calling for more dialogue and collaboration, and others advocating for more resistance and defiance. Some experts have suggested that the SEC’s approach is outdated and ineffective, as it fails to recognize the unique nature and benefits of crypto assets.
Others have argued that the SEC’s intervention is necessary and beneficial, as it aims to protect investors from fraud and manipulation.
