Binance.US revealed on Thursday (June 8, 2023) that it will be suspending US dollar deposits and that its banking partners are getting ready to suspend fiat US dollar withdrawal options as early as June 13, 2023. This update has come a few days after US regulators sued Binance and its CEO/co-founder Changpeng Zhao or “CZ”.
The US division of the largest crypto-asset exchange stated via a tweet on Friday (June 9) that the decision comes as it’s adopting “proactive” measures in its ongoing transition to a crypto-only platform for now.
As first reported by Reuters, trading, staking, deposits and withdrawals in cryptocurrency will stay completely operational. This, according to the exchange’s management – which shared the update with its clients.
As reported, the US Securities and Exchange Commission (SEC) this past Monday had filed a lawsuit against Binance and its founder Changpeng Zhao, and also proceeded to sue Coinbase, the largest US-based digital currency platform, only a day later.
These latest developments represent a significant escalation of an aggressive crackdown on the nascent crypto sector by US regulatory authorities, after the spectacular collapse of FTX in late 2022.
It’s worth noting that US financial regulators stated earlier on Thursday (June 8) that they will be supporting a freeze on Binance’s assets. This, according to a US SEC filing to a federal court (which was made public).
Matthew Dibb, COO at Singapore’s Stack Funds, said:
“Binance.US is a considerably smaller business than their international group. Halting of withdrawals is obviously going to create or spur quite a bit of worry and panic. But day after day for the last week, Binance has been hit with various types of comments and issues from the SEC and regulators, so this was really to be expected.”
Tony Sycamore, market analyst at IG Markets, commented:
“The reaction has been extremely muted so far. Either the market has shrugged it off, or it hasn’t gotten a handle on it yet.”
Notably, Binance.US also stated via social media that the US SEC’s stance on crypto is “extremely aggressive and intimidating”, while pointing out that it may continue to “vigorously defend” themselves, their customers, and industry against the “meritless attacks” of the SEC.
Following all these developments, the crypto sector has criticized the US SEC Chair Gary Gensler‘s approach recently, especially after the new lawsuits. However, Gensler has denied allegations that the regulatory authority is attempting to bring down the crypto sector.
Wayne Huang, CEO at XREX Inc, said:
“As regulatory scrutiny continues, exchanges, stablecoin issuers and industry players will further specialize in different roles to collectively provide the best user experience,”