U.S. Banks Cut Off Giant Crypto Exchange

Following a federal lawsuit charging the world’s largest cryptocurrency exchange with illegal operations, U.S. banks are cutting ties with Binance, forcing it to block investors from using U.S. dollars on its American trading platform.  On the night of June 8, Binance announced in a Tweet that investors had just five days to withdraw any dollars from their accounts, while warning that “withdrawals may take longer than usual to process.” Binance said its U.S. trading platform would then become a “crypto-only exchange.”  The viability of the exchange may be threatened with investors no longer able to cash in their digital currency holdings.

Binance’s loss of access to U.S. banks is the latest blow to the cryptocurrency world where investors have lost billions due to fraud and seen quick profits disappear as prices swing wildly.

Numerous banks had already halted relationships with Binance, and others—Silicon Valley Bank, Silvergate Bank , and Signature Bank—had already failed.

In addition to suing Binance and its Chief Executive Officer Changpeng Zhao for failing to register as a securities exchange and lying to federal regulators, the Securities and Exchange Commission charged that Binance had mismanaged customer funds, shifting billions into subsidiaries owned by Zhao. “Defendants have enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk,” charged the SEC.