Binance.US, the American arm of the global cryptocurrency exchange Binance, has announced the suspension of USD crypto purchases amid an ongoing legal battle with the US Securities and Exchange Commission (SEC).
The decision comes as the exchange faces scrutiny from the SEC over alleged violations of US securities laws.
Binance.US' Statement
In a statement, Binance.US highlighted concerns regarding the SEC's actions and their impact on the exchange's business partners, which have presented challenges in maintaining banking relationships.
As a result, Binance.US said it had taken measures to protect its customers and platform by temporarily suspending USD deposits and notifying users about the potential pause in fiat (USD) withdrawal channels by June 13, 2023. The exchange advises customers to take appropriate action regarding their USD holdings.
However, during this period, Binance.US assures users that cryptocurrency trading, staking, deposits, and withdrawals remain fully operational.
"Any downtime in processing withdrawals may be the result of elevated volumes and weekend bank closures. Moreover, trading, staking, deposits and withdrawals in crypto remain fully operational," the exchange said in a tweet.
The crypto exchange emphasizes its commitment to maintaining 1:1 reserves for all customer assets to ensure the security of user funds. However, customers may experience processing delays for withdrawals due to increased volumes and weekend bank closures.
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Binance Legal Dispute with SEC
The legal dispute between Binance.US and the SEC revolves around alleged violations of US securities laws by the crypto company and its founder, Changpeng Zhao.
The SEC's civil complaint focuses on Binance's banking transactions and raises concerns about the movement of significant assets between the crypto exchange's US and international entities via offshore holding companies.
In response, the SEC filed an emergency motion for a temporary restraining order to freeze US dollars held by Binance. While customers' funds will not be lost, the suspension of USD transactions indicates that Binance's banking partners have deemed the exchange a risky client.
The revelations stemming from the SEC case appeared to have reached a level of significance that cannot be overlooked. Customers who have yet to withdraw their funds before the shutdown date may still have the option to convert their holdings to stablecoins like tether, withdraw them, and convert them back to dollars on other platforms.
According to documents submitted to the SEC, Binance.US had previously revealed its collaborations with financial institutions like Axos Bank, Cross River Bank, and several others. These partnerships reportedly played a crucial role in processing billions of dollars in transactions for the U.S.-based exchange.
However, CNBC reported that as some banking partners had already terminated their services to Binance, it is currently unclear which banking partners the crypto company has managed to maintain throughout the ongoing legal proceedings.
"While we remain open to a productive compromise that enables a thriving digital asset marketplace in America, Binance.US will continue to vigorously defend ourselves, our customers, and industry against the meritless attacks of the SEC," the crypto exchange said.
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