9 June (Reuters) – Trading platform Robinhood Markets (HOOD.O) has announced that it will suspend dollar deposits after U.S. securities regulators tightened their crackdown on the cryptocurrency sector. ) announced that it will delist some cryptocurrency tokens.
Binance US, a purported independent partner of Binance, tweeted on Thursday that its partner banks are preparing to suspend dollar withdrawal channels as early as June 13 after the U.S. Securities and Exchange Commission asked a court to freeze its assets. said it is proceeding with Customers must withdraw their funds by Tuesday.
The development is the latest blow to the world’s largest cryptocurrency exchange, which has filed an SEC lawsuit against Binance’s U.S. operations for manipulating trading volumes and commingling customer assets, among other civil charges it denies. The question arises as to whether it will survive.
“This is very serious for Binance.US,” said Clara Medalley, research director at digital asset data provider Kaiko.
“The inability of Binance.US to offer USD trading services in regions specifically built for the exchange to operate is an existential threat.”
Robinhood announced on Friday that it will remove from its platform three cryptocurrency tokens that the SEC identified as securities in a lawsuit against Binance and another lawsuit filed against Coinbase (COIN.O) the following day. is a sign that the SEC litigation is already closed. Ripple to the virtual currency market.
The SEC on Monday banned Binance, its CEO and founder Zhao Changpeng, and the operations of Binance US, alleging that Binance was involved in a “web of deception” that artificially inflated trading volumes and misappropriated customer funds. sued. They secretly controlled the US entity while publicly claiming to be independent.
Binance did not immediately respond to a request for comment. Binance is not a U.S. exchange, so it claims the SEC has limited scope, and said it would “strongly” defend its platform.
According to the agency, in a subsequent filing on Tuesday, the SEC ordered the federal court to order Binance’s U.S. bank accounts, including more than $2.2 billion in total customer assets held in cryptocurrencies and about $377 million in U.S. dollar bank accounts, according to the agency. asked to freeze the assets. The SEC has expressed concern that the company may transfer these funds overseas. Binance.US claimed the motion was “unreasonable.”
On Thursday, Binance.US announced that the SEC’s action has created “challenges” for financial service providers and that the exchange will no longer accept dollar deposits as part of its planned transformation into a “cryptocurrency-only exchange.”
[1/2] The Binance US logo is seen on the stands at the Bitcoin Conference 2022 in Miami Beach, Florida, USA on April 6, 2022.Reuters/Marco Bello/File Photo
Investors have withdrawn more than $31 million from Binance US over the past 24 hours as of 12pm EDT Friday, according to data firm Nansen.
Binance.US operator BAM Trading keeps its clients’ funds at California-based Axos Bank, according to a May 26 letter from BAM Trading’s attorneys to the SEC published by the SEC on Tuesday. .
Axos did not immediately respond to a request for comment.
The Wall Street Journal reported in April that Binance.US was having trouble finding bank partners after the collapse of Signature Bank.
Binance.US said cryptocurrency-denominated trading, deposits, withdrawals, and “staking,” where users deposit cryptocurrencies for use in blockchain transactions, will remain fully functional.
“Regulatory Gray Area”
Crypto companies started in a regulatory gray area, but the SEC, led by Chairman Gary Gensler, has steadily asserted jurisdiction over the industry, and most tokens are securities and should be subject to the same disclosure rules. claimed.
As a result of this week’s lawsuit, other U.S. cryptocurrency exchanges are likely to be targeted as well, expanding the number of cryptocurrencies that the SEC certifies as securities, commonly known as Solana, Cardano, and Polygon. Tokens that are traded will also be included. Robinhood has announced that it will remove these three coins effective June 27.
The Binance and Coinbase SEC lawsuit “has created a cloud of uncertainty regarding these assets. As a result, our team has decided to end support for them,” the company tweeted.
Ratings agency Moody’s changed its outlook on Coinbase from “stable” to “negative” on Thursday, citing the potential impact of the SEC lawsuit. Coinbase’s stock dropped 1.9% at the end to $53.85.
Coinbase did not immediately respond to a request for comment.
Reported by Hannah Lang in Washington, Elizabeth Howcroft in London and Ray Wee in Singapore. Additional reporting by Tom Wilson, London and Rahat Sandhu, Bangalore.Editing: Michelle Price and Matthew Lewis
Our criteria: Thomson Reuters Trust Principles.
