Global crypto exchange Binance is in the eye of the storm. Days after the United States securities regulator sought to expedite the process of freezing the platform’s assets, Binance.US announced on Thursday that it would suspend U.S. dollar deposits as early as June 13.
The online exchange will also pause its relationship with its banking partners.
Credit: Kanchanara – Unsplash
Binance.US customers won’t be able to buy crypto assets with U.S. dollars as soon as next week, as the exchange stated its intention to pause USD fiat channels. The U.S.-based subsidiary of one of the world’s leading crypto exchanges said in a tweet posted late Thursday night that it was taking “proactive steps” in transitioning to a crypto-only exchange, pre-emptively disabling its users from purchasing and depositing U.S. dollars for the moment. Meanwhile, deposits and withdrawals in cryptocurrencies will remain fully operational.
Binance.US reacted strongly on Twitter, blaming the SEC’s “unjustified civil claims” against their business and “extremely aggressive and intimidating” take. In the same Thursday tweet, the exchange said it would “vigorously” defend its customers and industry against “meritless attacks”.
These developments come at a time of increasing scrutiny of the platform’s banking transactions. The U.S. Securities and Exchange Commission took the crypto world by storm on Monday by suing Binance and its CEO Changpeng Zhao, filing thirteen charges against the Chinese-born Canadian billionaire and the exchange he founded, including calculated invasion of the law and conflicts of interest. The SEC subsequently filed an emergency motion requesting a temporary restraining order against Zhao in a bid to prevent asset flight.
The SEC’s decision also marks a substantial escalation of the crypto crackdown by regulators. The collapse of cryptocurrency exchange FTX in November 2022 had already set back the industry by years. And the early days of the crypto’s regulatory grey area could be over soon. In the aftermath of the FTX debacle, countries like Britain laid out plans to strengthen the rules surrounding crypto lending and align the regulation of cryptocurrency businesses with that of traditional financial firms. Last month, the European Union announced working on tougher tax rules to oversee crypto transactions.
In the U.S., SEC chair Gary Gensler made abundantly clear his views on crypto tokens. Almost every crypto transaction, he said, falls under the agency’s jurisdiction. And the SEC didn’t stop at Binance, continuing its offensive on the crypto sphere by charging Coinbase for allegedly operating as an unregistered crypto broker. The SEC claimed Coinbase traded at least 13 assets that were, in fact, securities. Both lawsuits could therefore reshape the crypto ecosystem. For the time being, however, the crypto market barely reacted to the news, which had arguably come to be expected. While other major cryptocurrencies might be bracing for impact still, Bitcoin sank over 5% on Monday before bouncing back despite the turbulence caused by the SEC’s bombshell legal actions. Experts thus predict short-term gains may be at hand for owners of the token.
Despite constant upheavals in the Bitcoin market and a road to recovery that is still a long way ahead, indeed, the largest digital asset in the crypto sphere keeps attracting investors believing in its revolutionary potential. Early adopters and latecomers are equally convinced that Bitcoin can one day become a borderless currency. And for all intents and purposes, the world’s most famous cryptocurrency has already entered the mainstream.
Bitcoin is already recognized as a legal tender in several countries, while many websites allow cryptocurrency transactions. The iGaming industry notably paved the way for the widespread use of Bitcoin, which stands alongside more traditional payment methods on gaming sites. The anonymity of crypto assets like Bitcoin and Ethereum plays out in their favor. Fast-processing options like e-wallets and prepaid cards also prove popular methods for gamers to fund their bankroll. And fast payout platforms even ensure users they may withdraw their deposits in the currency of their liking in speedy fashion.
But what’s to come for the crypto-trading community? While worries are rife among Binance.US users, the shutdown date announced by the exchange doesn’t mean customers will lose their money. Even those users who have failed to withdraw their money by June 14 could still convert their assets to a stablecoin. But the halting of withdrawals will undeniably spur some panic. And quite a few other U.S-based crypto exchanges could soon be caught in the crossfire and be at risk of enforcement action as new regulatory developments might make headlines before long.