The North American arm of global cryptocurrency exchange Binance has faced challenges creating a new banking partner to serve as an official ramp in and out for its clients in the country, according to a statement. Reportage From The Wall Street Journal on April 8.
The Wall Street Journal reports that recent bankruptcies at Silvergate and Signature Bank have left Binance.US without banking services, relying on intermediary banks to store funds on its behalf, citing “people familiar with the matter.”
Regulatory crackdown on banks with crypto clients is also another factor contributing to the exchange’s difficulties. In March, the US CFTC sued Binance Holdings and its CEO Changpeng “CZ” Zhao for alleged trade violations. Cryptocurrency trading has been the focus of the CFTC investigation since 2021.
Binance.US needs a bank to directly hold US dollars for its customers, but recent attempts to establish direct banking relationships with banks such as Cross River Bank and customers Bancorp have been unsuccessful.
Binance.US customers were affected by the lack of a direct bank. In the latest mode update, the exchange He said It said it “was transitioning to new banking and payment service providers in the coming weeks,” adding that some US dollar deposit services would be temporarily affected during the transition.
Binance.US currently holds client funds through fintech firm Prime Trust. A Prime Trust spokesperson stated that all funds received from customers are stored through its banking partners.
“We work with many banking and payment providers in the US and continue to onboard new partners as we upgrade our internal systems to create a more stable platform and offer additional services,” a Binance.US spokesperson told WSJ.
Binance.US is operating in a similar environment to what crypto firms in the UK are facing, with banks dropping clients from the crypto sector. The few banks still working with cryptocurrency firms in the UK are asking for more documentation and information on how to monitor customer transactions.
