After working with its banking partners, the American branch of the cryptocurrency exchange Binance.US alerted users it has found a solution to its problems and that users can withdraw their money. However, it cautions that the relief may not last.
In a customer update on June 22, the purportedly autonomous Binance subsidiary stated that its system is still fully functional and that U.S. users’ requests to withdraw their assets are anticipated to resume processing within five business days.
In the midst of its protracted dispute with the Securities and Exchange Commission, Binance.US banned dollar deposits on June 9 and informed its users that fiat withdraw routes would soon be unavailable.
Customers were also alerted at the time that its banking partners were getting ready to halt fiat withdrawal routes as early as June 13; however, nothing of the kind has happened as of yet.
In its most recent message, Binance.US encouraged any users who had unsuccessful withdraw attempts to try again “as our systems remain fully operational,” but it also issued a warning that the relief would not last indefinitely.
“While USD withdrawal remains fully operational on the platform today, we expect our banking partners to discontinue that service in the near future,” the exchange stated.
As it transforms to a crypto-only exchange, Binance.US is also pushing its users to “use, withdraw, or convert your USD to a stablecoin to continue crypto-to-crypto trading.”
The business has also experienced issues with Australian banking partners. When local banking and payment partners ceased their services in May, there was a rush to sell and cash out, and Bitcoin prices on the Australian branch of Binance plunged to a 20% discount.
Just a few days ago, the Securities and Exchange Commission (SEC) is currently embroiled in a legal dispute with Binance.US, Binance Holdings Limited, and Binance CEO Changpeng Zhao.
The claim was made in a motion that was submitted on June 21 to the US District Court for the District of Columbia by attorneys for Binance.US.
Binance.US’ legal team argues that the statements made by the United States Securities and Exchange Commission in a news release on June 17 were false and urged the financial regulator to follow the “applicable rules of conduct.” The SEC charged Binance and CEO Changpeng Zhao with combining client assets in a news release.
“Given that Changpeng Zhao and Binance have control of the platforms’ customers’ assets and have been able to commingle customer assets or divert customer assets as they please, as we have alleged, these prohibitions are essential to protecting investor assets,” said the SEC’s charges.
According to the motion, the Securities and Exchange Commission’s press release contained claims that were unsubstantiated and without supporting data. The lawsuit also emphasized that the Securities and Exchange Commission had not provided any proof to back up its allegations that Binance had mixed up user cash or diverted them at will. A spokesman of Binance said,
The SEC has no evidence that BAM [Binance.US] customer assets have been dissipated, commingled or misused in any way.”
Additionally, it said that the Securities and Exchange Commission’s news release was made with the intent of further confusing the crypto markets and harming BAM customers.
“SEC’s press release seemed designed to introduce unwarranted confusion into the marketplace, which could have the effect of harming BAM customers rather than protecting them. It also risks tainting the jury pool with misleading descriptions of the evidence concerning the Defendants.”
Data from Kaiko shows that after the lawsuit, Binance.US’s market share among American exchanges fell to 1%, a sharp decrease from the 20% seen in April. CEO Changpeng ‘CZ’ Zhao noted at the time that the US affiliate’s volume had reached 41% of Coinbase.
Liquidity on Binance.US has gotten worse because of the SEC’s litigation, with some whales selling their Bitcoin at discounts of up to 15%.
Nevertheless, the SEC’s lawsuit classifies some of the aforementioned assets as securities, and among the 13 allegations against Binance, their unregistered sale is stated. Due to a lack of clarity regarding their regulation, brokers eToro and Robinhood, as well as the cryptocurrency platform Bakkt, delisted several of these assets. Coinbase, which is being sued by the SEC for similar allegations, declined to take the assets mentioned in the lawsuit off the market at the same time.
The SEC had already asked for the freezing of all Binance.US assets as part of the case against Binance in order to stop the movement of such funds abroad. Later, the parties tentatively agreed that the assets would not be frozen but that global platform personnel would not be able to excersise control over them.