The American branch of Binance, the giant cryptocurrency exchange, said late Thursday that it would no longer allow clients to trade with US dollars on its platform after its banking partners shut down the company in response to a crackdown by federal regulators.
The move is a major blow to Binance.US, the US branch of the world’s largest crypto exchange. One of the most important functions of an exchange is that it allows users to convert their traditional money into digital currencies such as Bitcoin or Ether. Binance will no longer be able to offer that service in the United States.
In a message to customers, Binance.US said it was “taking the necessary steps as we transition to a crypto-only exchange”. In recent days, the company said, its banking partners had indicated that they would no longer facilitate the movement of dollars on and off Binance.US’s platform.
The Securities and Exchange Commission sued Binance on Monday, accusing the company and its CEO, Changpeng Zhao, of mishandling customer money and lying to regulators. In a separate filing, the SEC asked a federal judge in Washington to freeze assets of Binance’s US-based clients, citing “the defendants’ years of violent behavior.”
Binance representatives did not immediately respond to a request for comment.
The crypto industry has been under intense pressure from federal regulators since November, when the collapse of the FTX exchange sparked an industry-wide crisis. The day after it sued Binance, the SEC filed a separate case against Coinbase, the largest US crypto exchange. Some crypto companies have vowed to fight the crackdown, while others are making plans to leave the United States entirely.
In its message to clients on Thursday, Binance.US said it was facing “extremely aggressive and intimidating tactics” from the SEC. Tuesday.
At the same time, the company tried to assure its customers that their savings were backed by money it has in reserve.
“For the avoidance of doubt, we maintain 1:1 reserves for all client assets,” the statement read. “Customer money is always safe, secure and available.”
