On Tuesday, Binance.US, a major cryptocurrency exchange, announced a revision in its terms of service, effectively banning direct U.S. dollar withdrawals. Users are now required to convert their dollars into stablecoins or other digital assets prior to withdrawal.
This move follows the suspension of U.S. dollar deposits earlier this year in June, a decision made in response to the SEC's intensified scrutiny of the crypto sector. This regulatory pressure led to hesitation among Binance.US's banking partners, prompting them to distance themselves from further engagements within the crypto industry.
Binance.US had previously warned its users about potential disruptions in dollar withdrawals, hinting at a complete halt by June 13. The SEC has initiated legal action against Binance.US, its parent company Binance, and CEO Changpeng Zhao for operating unregistered securities operations. This issue is expected to be a key discussion point at the upcoming Benzinga's Future of Digital Assets conference.
In addition to these regulatory challenges, Binance.US has also been managing lawsuits related to its transactions. Last month, the company severed ties with its euro payments collaborator without announcing a successor, marking another setback for the exchange.
The revised terms of service represent a significant departure from standard financial protections. Previously, Binance.US's U.S. dollar deposits were insured by the Federal Deposit Insurance Corporation (FDIC). Now, customers are obligated to convert their USD into stablecoins or other digital currencies before they can proceed with withdrawal. This change was communicated to customers via email as part of the exchange's comprehensive service reassessment.
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