Binance.US, the American branch of the world’s largest cryptocurrency exchange, has announced some major changes to its terms of service (ToS) that may affect its users’ ability to withdraw USD and access FDIC insurance.
Binance.US Continues to Struggle Due to Regulatory Pressure
According to a tweet by crypto trader Asher Hopp, Binance.US has updated its ToS to state that it no longer holds USD, users who previously deposited USD can no longer withdraw it, and there is no longer any FDIC insurance for crypto deposits.
This is the email Binance sent to customers informing them that their USD has been rugged from real USD into BNB/BUSD pic.twitter.com/5EAhyic9GP
— Asher Hopp (@AsherHopp) October 17, 2023
The tweet also included a screenshot of an email Binance.US sent to its customers, informing them that their USD holdings have been converted into BNB/BUSD, the native token and stablecoin of Binance.
The only option for users who want to withdraw fiat from Binance.US is to send BUSD, a stablecoin pegged to the US dollar and issued by Paxos Trust Company.
However, Hopp questioned the regulatory status of BUSD in the US, suggesting that it may be an unregistered security. This concern was heightened by the fact that Binance announced in August that it would end support for BUSD in 2024, as Paxos will discontinue the redemption of BUSD by February 2024.
This is not the first time that Binance.US has faced regulatory challenges in the US. In June, the exchange was reportedly under investigation by the US Department of Justice and the Internal Revenue Service for possible tax evasion and money laundering.
In July, Binance.US CEO Brian Brooks resigned after less than four months on the job, citing differences over strategic direction. In September, Binance.US temporarily suspended crypto withdrawals due to network issues.
These events indicate that Binance is facing increasing pressure from regulators around the world, as it tries to balance its global expansion and compliance efforts. Users of Binance and its affiliates should be aware of the risks and uncertainties involved in dealing with such a complex and dynamic platform.