In a move that has sent shockwaves through the cryptocurrency community, Binance.US, the American affiliate of the world’s largest cryptocurrency exchange, has halted direct dollar withdrawals for its customers. The decision, which came into effect on October 16, 2023, has raised concerns among users about the accessibility of their funds and the overall stability of the platform.
“We are temporarily suspending USD bank transfers as of February 8th,” a Binance spokesperson told CNBC. “Affected customers are being notified directly.” The company said “0.01% of our monthly active users leverage USD bank transfers” and added that “we are working hard to restart service as soon as possible.”
While trading, staking, deposits and withdrawals in cryptocurrencies would remain fully operational, customers would be unable to deposit or withdraw US dollars from the exchange, as “our payment and banking partners have signalled their intent to pause USD fiat channels as early as June 13, 2023”. Binance.US said it encouraged its customers to “withdraw their USD” by 13 June but warned that because of elevated volumes, withdrawal might take longer than usual to process. The company stressed that customer funds were “safe, secure and available”. Customers who are unable to get their U.S. dollars off of the platform in time may have those funds converted to a stablecoin, which would allow that money to be withdrawn from the exchange. U.S. dollar-denominated trading pairs will start being delisted next week.
The suspension of USD withdrawals is the latest in a series of setbacks for Binance.US. In June 2023, the exchange was sued by the U.S. Securities and Exchange Commission (SEC) for allegedly operating as an unregistered securities exchange. The SEC also accused Binance.US of misleading investors about the risks associated with certain cryptocurrency tokens. Binance.US has attributed the suspension of USD withdrawals to “a number of factors, including the increasingly uncertain regulatory environment in the United States.” The exchange has also cited the ongoing litigation with the SEC as a contributing factor.
BNB, a crypto token native to Binance, fell about 2.5% as of 10:45 a.m. in Singapore on Friday, extending a recent period of underperformance of wider digital-asset markets. Meanwhile, the agency on Thursday strongly rebutted criticism that the agency is trying to crush the crypto industry, and said many companies in the space had made a “calculated economic decision” to flout its rules.
Binance.US called SEC’s recent actions against Binance, its affiliates, Coinbase, Bittrex, and others “extremely aggressive” and “a campaign against the American digital asset industry.”
Binance said customers can still use other fiat currencies or payment methods to purchase crypto. For the small number affected, “we’ll have a new partner to announce for those users in the next couple weeks,” the spokesperson said.
The suspension of USD withdrawals is a significant setback for Binance.US and the cryptocurrency market as a whole. It remains to be seen how the exchange will address this issue and what the long-term implications will be for its users and the broader cryptocurrency ecosystem.