WASHINGTON: Crypto exchange Binance.US said on Thursday it is stopping U.S. dollar deposits and users will soon not be able to withdraw dollars from the exchange after U.S. financial regulators said they supported freezing Binance’s assets.
The purportedly independent U.S. affiliate of Binance, the world’s largest crypto exchange, said in a tweet late on Thursday that its banking partners are preparing to stop dollar withdrawal channels as early as June 13.
Binance.US said in the customer notice that it would no longer accept dollar deposits as part of plans to change to a “crypto-only exchange”. It did not give details of who its banking partners are.
On Monday, the U.S. Securities and Exchange Commission (SEC) sued Binance, its founder and CEO Changpeng Zhao, and the operator of its U.S. exchange. The lawsuit marked a dramatic escalation of a crackdown on the industry by U.S. regulators, with the SEC suing major U.S. exchange Coinbase a day later.
The SEC alleged in 13 charges that Binance artificially inflated its trading volumes, diverted customer funds, failed to restrict U.S. customers from its platform and misled investors about its market surveillance controls.
The SEC on Tuesday asked a federal court to freeze Binance’s U.S. assets. Binance.US called the motion “unwarranted,” saying it had addressed SEC concerns over the safety of customer assets.
In its tweet on Thursday, Binance.US said crypto-denominated trading, deposits, withdrawals and “staking” – where users deposit cryptocurrencies for use in blockchain transactions – would remain fully operational.
“Halting of withdrawals is obviously going to create or spur quite a bit of worry and panic,” said Matthew Dibb, COO of Singapore crypto platform Stack Funds.
Crypto prices barely reacted to the news, with bitcoin last trading flat $26,512. It was headed for a weekly loss of about 2.3%, after having dipped to an over two-month low of $25,350 earlier in the week as the SEC crackdown stoked nerves.
Binance’s BNB token, the world’s fourth-largest, slid 1.5% to $258.76.
Binance.US had struggled to find banking partners after the failure of Signature Bank, the Wall Street Journal reported in April.