Key Points:
- Binance US enforces a cryptocurrency-only withdrawal system, requiring users to convert USD holdings.
- The move follows an ongoing legal battle with the SEC, which began in June.
- Binance US had previously suspended USD deposits and continues to urge users to transition to cryptocurrencies for trading.
In a dramatic move, Binance US, the American arm of the global cryptocurrency exchange, has suspended direct withdrawals in U.S. dollars. This decision comes on the heels of an ongoing legal tussle with the U.S. Securities and Exchange Commission (SEC). To access their funds, users are now required to convert their USD holdings into stablecoins or other digital assets, effectively transitioning to a cryptocurrency-only withdrawal system.
Binance US, a subsidiary of Binance, revealed these changes in an update to its terms of use. The exchange clarified that users can access their USD holdings by utilizing BAM-issued stored value wallets denominated in U.S. dollars, known as BAM Fiat Wallets. However, it’s essential to note that these funds must be converted into stablecoins or other cryptocurrencies before they can be withdrawn.
This policy shift follows a court order in early June that led to the suspension of U.S. dollar deposits, along with the threat of USD withdrawal channel closures by Binance US’s banking partners. Although Binance US managed to avert asset freezing, its share of the U.S. crypto trading market dwindled substantially.
Despite restoring U.S. dollar withdrawals on July 17, the exchange continues to urge users to transition to a cryptocurrency-based approach for trading. Binance US cautioned users that any remaining USD balance in their accounts may eventually be converted to the popular stablecoin USDT.
The legal battle with the SEC, which began on June 5, saw the regulatory body file 13 charges against Binance, its CEO Changpeng Zhao (CZ), and BAM Trading Services. The allegations include operating unregistered exchanges, broker-dealers, and clearing agencies. This ongoing legal struggle continues to shape the operational landscape of Binance US and the broader cryptocurrency industry in the United States.
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