The US division of crypto exchange Binance has reportedly suspended withdrawals of dollars by its customers from the digital asset platform (as per the firm’s updated terms shared on Monday).
In June of this year, Binance.US decided to halt US dollar deposits, following the US Securities and Exchange Commission’s (SEC) request asking the courts to freeze Binance’s assets.
As stated on the terms page by Binance:
“In the event that customers wish to withdraw U.S. dollar funds from their account, they may do so by converting U.S. dollar funds to stablecoin or other digital assets, which can subsequently be withdrawn.”
Binance.US has not yet provided detailed responses or feedback regarding these changes.
As widely reported, the SEC filed a lawsuit against Binance, its CEO and founder Changpeng Zhao or “CZ”, and Binance.US’s operations back in June 2023, claiming in 13 different charges that Binance had allegedly been involved in a “web of deception,” while artificially inflating crypto trading volumes and even diverted user deposits (as per the allegations).
Given these developments, it has become clear that Binance is facing considerable operational challenges. While regulatory authorities have been actively monitoring Binance’s operations, their efforts have not really helped the consumers. For instance, it can be very challenging to withdraw funds from Binance due to a wide range of issues/reasons.
Crypto exchange operators are trying to follow regulatory guidelines, which is why they may try to implement stricter AML/KYC policies. Cryptocurrency service providers may also try to implement certain restrictions so that only users from compliant jurisdictions can access such services. But all of these efforts are being carried out in a hostile regulatory environment, particularly when we consider the stance taken by the SEC.
Due to these issues, the customer experience (CX) is terrible, according to many users. In addition to these challenges, there are a growing number of scams, fraudulent activities, and damaging hacks/security breaches being carried out by malicious actors. For now at least, the crypto ecosystem is not user-friendly and can only be navigated effectively by technically-savvy and more sophisticated traders/investors. Clearly, a lot more needs to be done to enable mainstream adoption of digital assets.