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Amid the collapse of Silvergate Bank and increased regulatory crackdown of the crypto industry, Binance’s US arm is having trouble securing a bank to handle customers’ funds.
The Wall Street Journal (WSJ) reported on Saturday that Binance.US, the crypto exchange’s US arm, has been unable to secure a banking partner following the collapse of several crypto-friendly banks in the country. Before the recent banking crisis, customer deposits were sent to either Signature Bank or Silvergate Capital Corp.
In the meantime, Binance informed its customers that “certain USD deposit services will be temporarily unavailable.” The exchange further said it was “transitioning to a new banking partner,” and services would resume once it secured a partnership.
The report states that Binance.US currently uses at least one intermediary to store funds. Since funds are held with a third party, delays in sending and moving funds are experienced.
A spokesperson for Binance.US told the WSJ:
We work with multiple U.S.-based banking and payment providers and continue to onboard new partners while upgrading our internal systems to create a more stable fiat platform and offer additional services.
Banks Are Reluctant to Deal with Binance
The WSJ reports that the exchange unsuccessfully attempted to partner with Cross River Bank, Customer Bancorp Inc., and a Pennsylvania-based regional bank, but the banks were hesitant to provide their services citing regulatory concerns.
The United States Commodity Futures Trading Commission (CFTC) recently filed a lawsuit against Binance Holdings, the parent company of Binance.US, for alleged insider trading and KYC evasion. The CFTC alleges Binance operates an “illegal” exchange with a “sham” compliance system. The suit includes charges against Binance CEO, Changpeng “CZ” Zhao.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.