The biggest cryptocurrency exchange, Binance, recently declared that it will stop accepting withdrawals and deposits from bank accounts that utilize US dollars. The ban will start on Wednesday. The restriction of USD bank transactions on the exchange was not explained by the exchange in any way. The ban would only affect 0.01% of Binance’s clients, the company did note.
So, the understandably wary bitcoin community experienced a tiny degree of fear as a result of this statement All you ought to know about the suspension will be covered in this post. We’ll even speculate on why Binance made the choice it did. All you ought to know about the suspension will be covered in this post. We’ll even speculate on why Binance made the choice it did.
Are USD bank transfers on Binance.US being suspended?
Binance, no. The US is not stopping bank transactions in USD. Just Binance, the foreign version that Americans are not permitted to use, would be affected by this ban.
Keep in mind that Binance.US was created as a distinct legal corporation so that the exchange could join the US market without having to impose more restrictions on its other non-US consumers. Being a significant portion of Binance, it would be troubling if Binance.US prohibited USD bank transactions. US customers make deposits and withdrawals via USD bank transfers. It is seldom employed
In their release, Binance stated that just 0.01% of customers use USD bank transfers on the platform. It makes natural that Binance would halt the service given the low number of users. But Binance did not say that; they only said that since few people use it, their decision to stop it is not a big concern.
If this were the cause, Binance would have most certainly made it clear in its release. Additionally, discontinuing a service because too few people use it is not a good idea. These clients could switch to an exchange that does provide that choice.
Because of these factors, we don’t believe that Binance banned USD bank transactions for just this reason.
Regulatory issues with the US exist for Binance.
We believe that Binance’s regulatory troubles with the United States are the much more likely cause. This information was made public in December 2022 when the Justice Department said it was thinking about prosecuting leaders of Binance for financial offences connected to money laundering and the transmission of illegal monies via Binance.
Because of this, the exchange could reject USD bank transactions. According to the US Justice Department, Binance has often had lax anti-money measures, which have allowed criminals to utilize the exchange to circumvent US sanctions and launder money.
The US government’s stake in the exchange would be significantly diminished by halting all withdrawals from and deposits into USD bank accounts. The US authorities will be interested in an exchange, it is a simple reality if it can be used to withdraw US dollars to a foreign bank account., This explanation would also explain why Binance has not disclosed the cause of the ban.
They don’t want to frighten the market since that might quickly lead to a crash. However, every other way of buying and selling cryptocurrency on the exchange, including deposits and withdrawals in euros, the Binance spokesman stated, will not be impacted. According to the spokesperson, Binance customers will still be able to purchase and trade cryptocurrency using credit cards, Google Pay, Apple Pay, and on the Binance peer-to-peer marketplace.
The largest cryptocurrency exchange in the world by volume, Binance, caters to a worldwide user base but blocks access to its site for Americans due to regulatory issues. Instead, it refers US users to Binance US, an affiliate that operates a much smaller exchange.
Although Binance rejected to provide an official description, the suspension of USD bank payments is probably due to problems with its bank partner Signature Bank, which said last month that no longer crypto SWIFT transactions would be executed under $100,000.