SINGAPORE – Binance.US is being cut off from its banking partners in the fallout from a United States Securities and Exchange Commission (SEC) lawsuit against the crypto exchange.
In an e-mail to customers, the platform said its payment and banking partners have signalled an intent to pause US dollar fiat channels as early as next Tuesday.
That means “our ability to accept USD fiat deposits and process USD fiat withdrawals will be impacted”, the company said, while adding that it maintains 1:1 reserves for all customer assets.
Binance.US, which tweeted the e-mail, said it is “suspending USD deposits and recurring buy orders today and beginning the transition to a crypto-only exchange”.
In a lawsuit on Monday, the SEC accused Binance and its founder Zhao Changpeng of mishandling customer funds, misleading investors and regulators, and breaking securities rules.
The agency subsequently said it is seeking to freeze Binance.US’ assets and protect customer funds, including through the repatriation of client investments held abroad.
Binance.US said in the e-mail to customers that the SEC’s allegations are “unjustified” and that “we will continue to vigorously defend ourselves”.
The platform said it will delist trading pairs involving the US dollar starting next week but continue to support pairs involving stablecoins – tokens that are supposed to hold a constant value, typically US$1 (S$1.34).
Mr Richard Galvin, co-founder at Digital Asset Capital Management, said pricing differentials were emerging between Binance.US and Binance.com as US customers “look to rapidly sell and remove US dollars from the exchange”.
Something similar happened in late May at Binance Australia when the platform was about to be cut off from a key Australian dollar payment route, he said.
BNB, a token native to Binance, fell as much as 4.4 per cent on Friday, extending a recent period of underperformance of wider digital-asset markets. Bitcoin and Ether, the top two coins, shed about 1 per cent as at 12.40pm in Singapore.
BNB has sunk some 17 per cent this week, a retreat that compares with a roughly 4 per cent drop in a gauge of the 100 largest digital tokens over the same period.
The SEC this week widened its crackdown on crypto with the action against Binance followed later by a lawsuit against Coinbase Global for running an illegal exchange. Coinbase has rebutted the SEC’s claims and said it is prepared to take the legal fight all the way to the Supreme Court. BLOOMBERG
