Binance.US Stops US Dollar Deposits After Regulators Crackdown

June 8 (Reuters) – Crypto exchange Binance.US said on Thursday it would freeze U.S. dollar deposits and its banking partners were preparing to suspend fiat dollar withdrawal channels from June 13, days after U.S. regulators sued Binance and its CEO Changpeng. Jao.

The US unit of the world’s largest crypto exchange said in a tweet at 10:33pm EDT (0233 GMT Friday) that the move comes as it is taking “proactive steps” in transitioning to a crypto-only exchange for the time being.

Trading, staking, deposits and withdrawals are fully functional in the crypto, the exchange said in a notification to its customers.

On Monday, the US Securities and Exchange Commission (SEC) filed a lawsuit against Finans and its founder Zhao, and a day later sued Coinbase ( COIN.O ), America’s largest cryptocurrency platform.

The developments mark a dramatic increase in the crackdown on the industry by US regulators following last year’s FTX outbreak.

The US SEC made public in a federal court filing earlier Thursday that US financial regulators support freezing Binance’s assets.

“Binance.US is a significantly smaller business than their international counterparts. Stopping withdrawals would obviously create or incite anxiety and panic,” said Matthew Dibb, COO of Singapore crypto platform Stock Funds.

“But day by day over the past week, Binance has been hit with a variety of comments and issues from the SEC and regulators, so this was really expected.”

Prices of cryptocurrencies barely reacted to the news, with bitcoin last trading down to $26,496 on Friday’s Asian day.

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After falling to a two-month low of $25,350 earlier in the week, it was headed for a weekly loss of about 2% as SEC repression tickled nerves.

Binance’s BNB token fell 0.46% to $261.46.

“The reaction has been muted so far. Either the market has blown it, or it hasn’t gotten a handle yet,” said Tony Sycamore, market analyst at IG Markets.

In its Thursday tweet, Binance.US called the SEC’s takeover of the cryptocurrency “extremely aggressive and intimidating” and said it will “vigorously defend us, our customers and the industry against the SEC’s unmerited attacks.”

The crypto industry has attacked US SEC Chairman Gary Gensler in recent days following the lawsuits, though he has dismissed criticism that the agency is trying to crush the crypto industry.

“As regulatory scrutiny continues, exchanges, stablecoin providers and industry players will collectively further specialize in various roles to deliver a better user experience,” said Wayne Huang, co-founder and CEO of XREX Inc, the blockchain-enabled financial institution that operates XREX. USD-Crypto Exchange.

Reporting by Ray Wee in Singapore and Rahat Sandhu in Bangalore; Editing by Tanya Ann Thobell, Sri Navaratnam and Kim Coggle

Our Standards: Thomson Reuters Trust Principles.

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