Binance.us Suspends Direct US Dollar Withdrawals Due to Regulatory Pressures

On Tuesday, Binance.US, a prominent cryptocurrency exchange, announced changes to its terms of service, which now prohibit direct withdrawals in U.S. dollars. Users must first convert their funds into stablecoins or other digital assets before they can make a withdrawal.

This decision follows a suspension of U.S. dollar deposits that took place in June of this year, prompted by increased scrutiny from the SEC regarding the cryptocurrency sector. As a result of this regulatory pressure, many of Binance.US’s banking partners have opted to limit their engagement with the crypto industry.

Previously, Binance.US had notified its users about potential disruptions regarding dollar withdrawals, signaling that a complete halt might occur by June 13. The SEC has taken legal action against Binance.US, its parent organization Binance, and CEO Changpeng Zhao for allegedly operating unregistered securities. This topic is anticipated to be a central discussion point at the upcoming Benzinga conference focused on the future of digital assets.

In addition to these regulatory issues, Binance.US has also been dealing with lawsuits concerning its transactions. Recently, the exchange terminated its partnership with a euro payments provider without naming a replacement, adding to its operational challenges.

The updated terms of service are a notable shift from typical financial protections. While U.S. dollar deposits were previously insured by the Federal Deposit Insurance Corporation (FDIC), customers are now required to convert their USD into stablecoins or other digital currencies before withdrawal. This change was communicated to users via email as part of Binance.US’s broader assessment of its services.