- Binance cannot find a bank to work with in the US, reports claim.
- Banking troubles come as Binance faces a potentially fatal lawsuit with the CFTC.
- The lack of banking partners caused disruptions for Binance.US customers.
Binance’s recent regulatory troubles are causing major issues for its business in the US. After the recent lawsuit with the Commodity Futures Trading Commission (CFTC), the exchange struggles to find banking partners. Without these partners, Binance cannot effectively serve its US customers.
For instance, customers reported trouble withdrawing their fiat currency from the exchange. Furthermore, Binance.US no longer supports wire, Apple Pay, or Google Pay deposits.
At least two banks turned down Binance.US business in recent months, the WSJ reported on Saturday. Cross River Bank and Customers Bancorp Inc. declined to do business with the exchange, citing regulatory concerns.
Binance’s prior US banking partners, Signature Bank and Silvergate, both failed earlier this year. The demise of two crypto-friendly banks left Binance.US scrambling to find at least one US replacement.
In the meantime, Binance.US relies on several crypto-services and a fintech, Prime Trust LLC, to store user funds. However, this is not a long-term solution for the exchange and has already caused service disruptions.
Binance Facing Major Lawsuit with CFTC
The CFTC alleges that Binance offered unregistered derivatives to US investors. The lawsuit also alleges that Binance participated in market manipulation and used its position to trade against its users.
On the Flipside
- The reluctance of banks to work with crypto could eventually lead to crypto companies starting their own decentralized services to replace banks.
- The US banking system has seen a surge of bank runs in recent months. Crypto supporters are touting a decentralized alternative to fix the current system.
Why You Should Care
Binance’s inability to find banking partners highlights the centralization of the financial system in the US.
Read about Binance’s recent lawsuit with the CFTC:
Read about Thailand’s recent proposal to stimulate the economy with digital programmable money: