The United States banks involved in Binance put the brakes on Binance due to SEC concerns, with Binance blaming “Unjustified civil claims against our business.”
Customers will not be able to use U.S. currency to buy crypto currency as of this coming week. The SEC recently filed a complaint against the exchange and stated that the company violated securities laws.
The business is still running, however, with foreign currency being used. The SEC’s restraining order would have had the same effect on Binance anyway, as it essentially freezes U.S. dollars from the exchange.
The move still allows Binance customers to retrieve their money before the shutdown date of June 13, but also to convert their funds to a stable coin if they choose to do so.
The banks that have been involved in processing transactions for the exchange include but are not limited to the following: Silicon Valley Bank, Signature Bank Axos, Bank and Cross River Bank.
A number of these banks have experienced significant account withdrawals in 2023, and some banks had already stopped doing business with Binance before the announcement.
The move by banks in particular is not surprising as exchanges such as Binance have already fallen out of favor. It also shows a lack of appetite on behalf of banks to cross paths with the SEC.
While cryptocurrency has been quite resilient in 2023, banks still are unsure of their role when it comes to digital holdings and its relationship with exchanges.