Binance.US has stopped taking U.S. dollar deposits and plans to stop withdrawals as soon as June 13, the crypto exchange announced.
The U.S. subsidiary of the world’s largest crypto exchange made the decision late Thursday following a regulatory crackdown by the U.S. Securities and Exchange Commission, which charged Binance and its founder Changpeng Zhao Monday with 13 securities laws violations and filed a motion Tuesday to freeze Binance.US’s assets.
“The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry,” a spokesperson said in an emailed statement. “Binance.US and our business partners have not been spared in the use of these tactics, which has created challenges for the banks with whom we work.”
For a time, Binance.US will be a crypto-only exchange, the spokesperson noted, and to that end will remain fully operational. Binance.US will also maintain 1:1 reserves for customer assets, the spokesperson said.
The SEC’s crackdown on Binance comes in a wave of enforcement actions against and settlements with crypto industry players. This week, the SEC sued Coinbase, another exchange, for alleged securities violations. Nexo and Kraken have also seen enforcement actions this year.
According to the SEC, high-value U.S. customers have secretly and illegally been able to trade on the international Binance platform, despite assertions from the company. The SEC also alleged that Zhao and Binance controlled the operations of the Binance.US platform, despite claims that it was separate and independent — allegations supported by former U.S.regulatory and former Binance.US president Brian Brooks, who said in published testimony, according to the Wall Street Journal, “What became clear to me at a certain point was CZ was the CEO of [Binance.US], not me.”
Additionally, the SEC alleged Binance allowed customer assets to commingle and be diverted, including to Sigma Chain and Merit Peak Limited, two companies owned by Zhao.
In a notice to customers Thursday night, Binance.US said that it “encourage[s] customers to withdraw their USD via bank transfer (ACH)” and that withdrawals may take up to several days due to elevated volumes and weekend bank closures.
An SEC spokesperson declined to comment beyond public filings.