Binance.US Stops Direct USD Withdrawals, Requires Conversion to Digital Assets
Binance.US has made the decision to no longer allow users to withdraw U.S. dollars directly from their accounts. This change was revealed through an update in the platform’s terms of use. Now, if you want to withdraw USD funds, you must first convert them into stablecoin or other digital assets, which can then be withdrawn.
The SEC’s Stance and Binance.US
This decision by Binance.US to halt direct USD withdrawals is not an isolated event. In June, the platform had already suspended dollar deposits. The reason behind this move is the U.S. Securities and Exchange Commission’s (SEC) strict approach towards the crypto industry, which has made banking partners hesitant to collaborate with crypto companies.
Furthermore, the SEC has taken legal action against Binance.US, its international counterpart Binance, and its founder Changpeng “CZ” Zhao. The allegations include operating unregistered securities platforms and concerns regarding custody practices and cooperation with legal requests.
Implications for FDIC Insurance
One important consequence of these updates in Binance.US’s terms of use is the change in FDIC insurance coverage for U.S. dollar deposits. Previously, these funds were protected under the Federal Deposit Insurance Corporation (FDIC). However, with the recent changes, U.S. dollar funds held in Binance.US wallets are no longer covered by this insurance.
Hot Take: Binance.US Adjusts Withdrawal Policy as Regulatory Pressure Mounts
Binance.US’s decision to discontinue direct USD withdrawals reflects the challenges faced by the exchange amidst increasing regulatory scrutiny. With the SEC’s concerns about compliance and legal action against its parent company, Binance.US is adapting its policies to navigate the evolving regulatory landscape. By requiring users to convert USD funds into digital assets before withdrawal, Binance.US aims to address regulatory concerns while continuing to provide services to its customers. However, the removal of FDIC insurance coverage for U.S. dollar deposits may raise additional concerns for users. It remains to be seen how these regulatory developments will impact Binance.US and the broader crypto industry.
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