Banking Partners Continue To Turn Their Back on Binance.US

In the wake of the recent turmoil stirred up by the Silvergate and Signature debacles, bankers worldwide have begun to distance themselves, keen to evade the anticipated blowback cautiously. The ripple effect of Monday’s lawsuits against prominent cryptocurrency platforms Coinbase and Binance.us generates industry-wide polarization.

Binance.US Faces SEC Legal Actions: Crypto Industry on Edge

The Securities and Exchange Commission (SEC) has brought a civil lawsuit against Binance. Allegedly, Binance.US, a domestic wing of the global cryptocurrency exchange, serves as the actual beneficiary. As proceedings have not yet commenced, companies exposed to the unfolding scenario prioritize fortifying their balance sheets.

Binance, Coinbase, and Kraken are deeply disappointed over the SEC’s perceived reluctance to participate in constructive dialogues before igniting litigation. The common sentiment suggests a preference for a court battle over a peaceful, solution-oriented discussion.

Binance on SEC Lawsuit: A Tug of War between Settlement and Litigation

Binance asserts that they have engaged in exhaustive and genuine discussions to reach a negotiated settlement to dispel the investigations. Yet, to their disappointment, the SEC has abandoned these discussions, opting to act independently and litigate. This move has left Binance disheartened, with the firm stating:

“While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis. We intend to defend our platform vigorously.”

Binance.us now finds itself in a tricky spot. Their involvement in the lawsuit has triggered anxiety amongst banking partners, causing them to hesitate and “put on hold” their associations with the crypto behemoth.

In a recent statement disseminated via Binance.US’s Twitter handle, the platform disclosed that banking partners are withdrawing their support. As a result, they are suspending fiat withdrawals from the 13th of June until further notice.

Crypto Investors’ Dilemma: The Future of Digital Assets

In theory, crypto investors might not perceive this development as significantly disruptive, as they can still cash out via stablecoins moved to a different exchange. However, conservative investors might view this as an opportune moment to withdraw from the market.

The decision to halt fiat withdrawals pertains exclusively to Binance.US. No communication has been issued about a similar move for Binance itself. But insiders suggest this move is not entirely off the table. Binance spokespersons have been tight-lipped about which banking entities they work with have withdrawn their support.

Because of its vast business operations, Binance has simultaneously been involved with several banking organizations. That includes Cross River Bank, Axos Bank, and the three recently shuttered banks that were at the center of substantial controversy earlier this spring.

The circumstances for Binance and Coinbase reflect a turbulent phase for the crypto industry, highlighting the need for regulatory clarity. As the events unfold, the global cryptocurrency community waits with bated breath, closely watching the next steps of these leading crypto platforms.

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