Dear Friends,
Following the allegations by Securities and Exchange Commission (SEC) on Binance on June 5, 2023 there were various confusions that were spread over the crypto market.
The following is the update after the allegation. Let's take a close watch on this.
Binance.US will no longer permit the use of U.S. dollars to purchase cryptocurrencies on its platform starting from June 13, 2023 This development severely impairs the exchange's operations within the United States, as its payment and banking partners have indicated their intention to halt USD fiat channels. The announcement of this change was made on Twitter by Binance, citing the "unjustified civil claims" made by the Securities and Exchange Commission (SEC) against their business. Consequently, Binance proactively disabled customers' ability to buy and deposit U.S. dollars.
The SEC has been closely scrutinizing Binance's banking transactions, leading to the filing of a civil complaint against the exchange and its founder, Changpeng Zhao. The complaint alleges that both entities violated U.S. securities laws. The SEC's concerns primarily revolve around Zhao's control and ownership of Binance's U.S. and international divisions, which the regulator claims have facilitated the transfer of billions of dollars between offshore holding companies. In response, the SEC filed an emergency motion for a temporary restraining order that would have frozen U.S. dollars held by the exchange.
It is important to note that customers will not lose their funds, as they still have the option to convert their holdings into stable coins like tether and subsequently withdraw them or convert them back into dollars through other means. Nevertheless, the decision by Binance's banking partners to sever ties indicates that they consider the exchange to be too risky, and the revelations emerging from the SEC case have become too significant to overlook.
Binance has disclosed various banking partners it has worked with in the United States, including Axos Bank, Cross River Bank, as well as Silvergate, Signature, and Silicon Valley Banks, the latter of which have experienced failures. According to documents submitted by Binance to the SEC, these banking partners have processed billions of dollars in transactions for the U.S. exchange. While some banking partners had already discontinued their services to Binance, it remains unclear which banking partners the exchange has managed to retain.
Let’s wait and watch the progress in this regard!
