Just days after US regulators sued Binance and its CEO Changpeng Zhao, the exchange said that it would be banning US dollar deposits and that its banking partners planned to pause fiat currency withdrawal routes beginning on June 13.
The US branch of the largest cryptocurrency exchange in the world announced the change in a tweet, saying it was taking “proactive steps” towards becoming a cryptocurrency-only exchange.
In a notice to its customers, the exchange assured them that all aspects of cryptocurrency trading, staking, depositing, and withdrawing will continue as usual.
Binance and its creator, Zhao, were sued by the US Securities and Exchange Commission (SEC) on Monday, while Coinbase, the largest US cryptocurrency platform, was sued the following day.
Following the collapse of FTX last year, US regulators have increased their crackdown on the business dramatically, as evidenced by recent events.
Earlier on Thursday, the US SEC filed with a federal court and made public a statement from US financial regulators saying they supported a freeze on Binance’s assets.
“Binance, The United States branch of their company is far smaller than the rest of the global branch. Stopping withdrawals “is obviously going to create or spur quite a bit of worry and panic,” said Matthew Dibb, chief operating officer of Singapore’s Stack Funds cryptocurrency exchange.
However, “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.”
Bitcoin, the most popular cryptocurrency, was trading slightly lower during the Asian trading session on Friday, at $26,496.
After hitting a two-month low of $25,350 earlier in the week as the SEC crackdown fueled concerns, it was on track for a weekly loss of around 2 percent.
Binance is taking crucial steps
So yet, responses have been quite subdued. According to Tony Sycamore, market analyst at IG Markets, “either the market has shrugged it off, or it hasn’t gotten a handle on it yet.”
Binance.US tweeted on Thursday that the SEC’s stance on cryptocurrencies is “extremely aggressive and intimidating,” and that the exchange will “vigorously defend ourselves, our customers, and industry against the meritless attacks of the SEC.”
US SEC chair Gary Gensler has been under fire from the cryptocurrency business in the days following the lawsuits, but he has subsequently pushed back against claims that the agency is out to destroy the cryptocurrency market.
As regulatory scrutiny increases, “exchanges, stablecoin issuers, and industry players will further specialise in different roles to collectively provide the best user experience,” according to Wayne Huang, Co-Founder and CEO of XREX Inc, a blockchain-enabled financial institution that operates the XREX USD-crypto exchange.
To read our article about “UAE emigrants conveniently using crypto to transmit money” click here.
