The US branch of the giant cryptocurrency exchange Binance. said late thursday The company said it would no longer allow customers to use U.S. dollars to transact on its platform after partner banks stopped trading with the company following a federal regulatory crackdown.
The move is a major blow to Binance.US, the U.S. arm of the world’s largest cryptocurrency exchange. One of the main functions of exchanges is to allow users to exchange traditional money into digital currencies such as Bitcoin and Ether. Binance will no longer be able to offer its services in the United States.
In a message to customers, Binance.US said it was “taking necessary steps to transition to a cryptocurrency-only exchange.” According to the company, in recent days its partner banks have indicated that they will no longer facilitate the movement of dollars on and off the Binance.US platform.
The announcement comes after the Securities and Exchange Commission filed a complaint on Monday against Binance and its chief executive, Changpeng Zhao, for mishandling customer funds and lying to regulators. In a separate filing, the SEC asked a federal judge in Washington to freeze assets related to U.S.-based Binance clients, citing “defendants’ longstanding violations.”
A Binance representative did not respond to a request for comment.
The cryptocurrency industry has come under intense pressure from federal regulators since November when the collapse of the FTX exchange sparked an industry-wide crisis. A day after it sued Binance, the SEC filed another lawsuit against Coinbase, the largest cryptocurrency exchange in the United States. Some cryptocurrency companies have vowed to fight the crackdown, while others are planning to exit the US altogether.
Binance.US said in a message to customers on Thursday that it was facing “extremely aggressive and coercive tactics” from the SEC. The company announced it was suspending US dollar deposits and urged users to withdraw their US dollars stored on the exchange before the deadline. June 13th.
At the same time, the company sought to assure customers that their savings were backed by the funds they held.
“For clarification, we maintain a one-to-one reserve for all client assets,” the message said. “Customer funds are always safe and available.”
