The US branch of Binance, the giant cryptocurrency exchange, he said late thursday that it would no longer allow clients to trade on its platform using US dollars, after its banking partners shut down the company in response to a crackdown by federal regulators.
The move is a major blow to Binance.US, the American arm of the world’s largest crypto exchange. One of the main functions of an exchange is to allow users to convert their traditional money into digital currencies like Bitcoin or Ether. Binance will no longer be able to offer that service in the United States.
In a message to clients, Binance.US said it was “taking the necessary steps as we transition to a cryptocurrency-only exchange.” In recent days, the company said, its banking partners had signaled that they would no longer facilitate the movement of dollars on and off the Binance.US platform.
The Securities and Exchange Commission sued Binance on Monday, accusing the company and its chief executive, Changpeng Zhao, of mishandling client funds and lying to regulators. In a separate filing, the SEC asked a federal judge in Washington to freeze assets related to US-based Binance clients, citing “defendants’ years of wrongful conduct.”
Binance representatives did not immediately respond to a request for comment.
The crypto industry has been under intense pressure from federal regulators since November, when the collapse of the FTX exchange triggered an industry-wide crisis. The day after suing Binance, the SEC filed a separate case against Coinbase, the largest American crypto exchange. Some cryptocurrency companies have vowed to fight the crackdown, while others are making plans to leave the United States altogether.
In its message to clients on Thursday, Binance.US said it was facing “extremely aggressive and intimidation tactics” from the SEC. The company said it was suspending US dollar deposits and urged users to withdraw any dollars they have been storing on the exchange. Tuesday.
At the same time, the company tried to assure its clients that their savings were backed by the money it had in reserve.
“To be clear, we maintain 1:1 reserves for all client assets,” the message read. “Customer funds are always safe, secure and available.”