Binance.US suspends dollar deposits, braces for fiat withdrawal halt

Crypto exchange Binance.US has announced the suspension of US dollar deposits and the potential halt of fiat dollar withdrawal channels, just days after the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its CEO Changpeng Zhao. In response to the regulatory pressure, Binance.US is taking proactive steps to transition to a crypto-only exchange for the time being, while maintaining full functionality for trading, staking, deposits, and withdrawals in crypto.

Earlier this week, the SEC filed a lawsuit against Binance and Zhao, followed by a suit against Coinbase, the largest US cryptocurrency platform. This marks a significant increase in the crackdown on the crypto industry by US regulators, following the collapse of FTX last year. US financial regulators have expressed support for a freeze on Binance’s assets, according to an SEC filing made public.

Matthew Dibb, COO of Singapore crypto platform Stack Funds, commented on the situation: “Binance.US is a considerably smaller business than their international group. Halting of withdrawals is obviously going to create or spur quite a bit of worry and panic. But 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.”

Cryptocurrency prices have remained relatively stable in response to the news, with Bitcoin experiencing a minor decrease to $26,496. Binance’s BNB token saw a 0.46% drop to $261.46. Tony Sycamore, market analyst at IG Markets, observed that “the reaction has been extremely muted so far. Either the market has shrugged it off, or it hasn’t gotten a handle on it yet.”

In a tweet, Binance.US described the SEC’s stance on cryptocurrency as “extremely aggressive and intimidating,” and vowed to continue defending itself, its customers, and the industry against the SEC’s “meritless attacks.” The crypto industry has been critical of SEC chair Gary Gensler following the lawsuits, though Gensler has since dismissed claims that the agency is attempting to suppress the crypto industry.

Wayne Huang, Co-founder and CEO of XREX Inc, a blockchain-enabled financial institution operating the XREX USD-crypto exchange, believes that “as regulatory scrutiny continues, exchanges, stablecoin issuers and industry players will further specialise in different roles to collectively provide the best user experience.”