Binance.US Struggles to Find Bank Partners Amid Regulatory Crackdown

Overview of the Article

  • Binance.US has been unable to find a new bank partner after the collapse of Silvergate and Signature Bank.
  • A WSJ report has indicated that Binance.US is facing challenges in establishing a direct banking relationship with other banks.
  • The regulatory crackdown on banks with crypto clients is seen as a major factor contributing to its struggles.

Challenges Faced by Binance.US

Binance.US, the United States arm of global crypto exchange Binance, is in the process of identifying a new bank partner that will serve as a fiat on-ramp and off-ramp after the recent failures of Silvergate and Signature Bank left it without banking services. A WSJ report has however indicated that the exchange is facing challenges in finding this bank partner due to various factors such as regulatory crackdown on banks with cryptocurrency clients.

Impact of Regulatory Crackdown

The regulatory crackdown in the US on banks with cryptocurrency clients is seen as a major factor contributing to the struggles Binance.US is facing in identifying a new banking partner. The CFTC sued Binance Holdings and its CEO, Changpeng „CZ“ Zhao, last month for alleged trading violations and though CZ issued a statement refuting CFTC’s allegations, it has had an effect on the exchange leading to drop in its market share amongst other things.

Effect on Customers

The absence of an established direct bank has greatly affected Binance.US customers especially after Binance said that some US dollar deposit services would be temporarily affected while transitioning to new banking and payment service providers over the next few weeks.

Conclusion

In conclusion, despite numerous attempts at establishing direct banking relationships with Cross River Bank, Customers Bancorp among others, Binance US continues to face difficulties due to ongoing regulatory scrutiny which have led to reduced market share among other effects directly impacting customers using its services