Binance Halts US Dollar Deposits in Response to Biden’s Increased Cryptocurrency Regulation Efforts

In response to the Biden administration’s intensified scrutiny of the cryptocurrency sector, Binance is set to restrict dollar withdrawals from its US-based cryptocurrency exchange in the coming days.

Binance.US has informed its users that it will be imposing a complete prohibition on new dollar deposits and that US banks could cease withdrawals as soon as June 13.

This action follows allegations made against Binance, the world’s premier cryptocurrency exchange, and its founder Changpeng “CZ” Zhou, by the US Securities and Exchange Commission (SEC). The SEC accused them of operating a “deceptive network,” misappropriating investor funds, and breaching securities regulations.

In a recent Twitter statement, Binance.US criticized the authorities across the Atlantic for employing “highly assertive and threatening tactics” in what it perceives as an “ideological campaign” against cryptocurrencies.

The exchange has announced that operations related to other cryptocurrencies such as trading, deposits, and withdrawals will continue as usual, transitioning to a “crypto-only exchange” model.

In anticipation of the upcoming freeze on US dollar transactions, it seemed to encourage customers to either withdraw or convert their US dollars promptly. The exchange stated, “We advise customers to take necessary steps with their USD.”

Binance vowed to uphold a one-to-one correspondence between deposits and reserves. However, it warned of potential service disruptions due to “increased volumes.”

The parent company established Binance.US, a US subsidiary, following a ban on its main platform in 2019.

After the downfall of FTX, the second-largest cryptocurrency exchange, last year, regulators have initiated a comprehensive clampdown on cryptocurrency exchanges.

Coinciding with Binance’s warning, credit rating agency Moody’s downgraded Coinbase’s rating from “stable” to “negative.”

Coinbase, which boasts a valuation of $12bn (£9.6bn) and is listed in the US, faced a lawsuit earlier this week from US regulators for alleged unregistered securities sales.

The downgrade, according to the rating agency, “mirrors the uncertain extent of the impact that the SEC’s charges will have on Coinbase’s business model and cash flows.”

Cryptocurrency analysis firm Nansen reported that Binance’s global exchange experienced roughly $1.9bn in net outflows over the past week, and $348m in just the past 24 hours.

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