One of the world’s largest cryptocurrency exchanges, Binance’s American counterpart, decided to put a hold on the flow of the US dollar. Users can no longer make deposits on the platform using US dollars, and it is a major setback for the parent company from China.
The US regulatory body, the SEC (Securities Exchange Commission), and Binance were already not on great terms after the SEC sued them along with Coinbase, FTX, and more.
The banking partners of Binance are at work to implement new changes, and steps are being taken to withdraw the US dollar in all forms.
Binance Receives a Major Blow After SEC Allegations
Cryptocurrency exchanges like Binance are built with the motive of making users free from traditional forms of finance by taking them decentralized.
American investors in Binance cannot help but feel shocked, as even though they need US dollars for daily activities, they cannot invest them. They would need to take their money to other exchange platforms.
Such a bold move is not that surprising considering that just days ago, the SEC filed 13 charges against Binance and its CEO, Changpeng Zhao.
Some of the charges include diverting funds, volume manipulation, and an overall failure to follow SEC trading regulations. After targeting Coinbase, the next day Binance was sued for a major threat to their assets in the US. In the most recent progressions, the court declared the motion “unwarranted,” but it seems that Binance is ready to defend itself.
In their Twitter post, Binance highlighted that “user assets remain safe and secure, and the platform continues to be fully operational with deposits and withdrawals functioning as normal.”
Check out the entire Twitter thread by visiting here.
Sudden Change in the Plans of Binance USA
Just two days after making this announcement, Binance USA shared a message with its customers stating that they would no longer accept any deposits made in US dollars. The entire process is expected to be complete by June 13, and according to the post, Binance is attempting to transform itself into a ‘crypto-only’ platform.
So, investors in the US need to convert their dollar earnings into any crypto tokens, preferably stablecoins like USDT (Tether), for trading on Binance. As a result of such a rapid change, many prior banking partners of Binance cut ties, and the new ones are yet to be disclosed.
However, the procedure is ongoing, and for non-US dollar currencies, deposits, trading, staking, and withdrawals remain normal.
After the breaking of this news, the COO of Stack Funds, Matthew Dibb, said that the decision of Binance USA is going to cause significant panic. He shares his support for Binance in the SEC lawsuit by saying:
“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. This is going to be a long battle; it’s not going to get sorted in the next two or three months; it’s most likely going to take a few years.”
While Binance shared this message on Twitter, they also shared thoughts on the steps taken by the SEC in their hunt for Binance. They said, “The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry.”
According to the accusations made by the SEC, Changpeng Zhao, the CEO, is accused of creating a “web of deception” on Binance. This domino effect of filing lawsuits against cryptocurrency exchanges began right after the Bahamas-based platform FTX crashed.
Up next was Coinbase, and presently, Binance appears to be the target. Sam Bankman from FTX was found guilty of money laundering, securities fraud, and many more crimes, which gave him the nickname “crypto Robin Hood.”
Coinbase was charged with acting as an exchange platform without any registration as it failed to follow the terms of the SEC. Now, Binance is being accused of similar treason, and CEO Zhao is prepared to fight the accusations in court.
The SEC claims that Binance failed to keep the parent company and Binance USA as separate entities and does not run independently. Due to this, all the allegations rose, and the SEC has taken a firm decision to target all exchange bodies that take similar steps inside the USA.
Changpeng Zhao responded to the allegations by saying, “They subverted their own controls to secretly allow high-value US customers to continue trading on the Binance.com platform.”
Even so, there is a big question mark over the future of Binance in the USA, as SEC attacks are showing no signs of slowing down.
