Following the collapse of Silvergate Bank, Silicon Valley Bank, and Signature Bank, cryptocurrency firms have been looking for new banking partners in the United States. According to a recent report citing “sources familiar with the matter,” Binance US, the American subsidiary of the cryptocurrency exchange, is having a hard time finding an American banking partner.
Anonymous sources say that Binance has unsuccessfully sought to establish US banking partners.
The Wall Street Journal (WSJ) reported on Saturday that Binance US is experiencing difficulties finding a US banking partner. Currently, Binance US clients have been informed that “certain USD deposit services will be temporarily unavailable.” Binance US stated that it was “transitioning to a new banking partner” and that services would resume once the process was complete.
However, sources cited by WSJ reporters Caitlin Ostroff, Rachel Louise Ensign, and Alexander Osipovich indicate that Binance has faced challenges finding a banking partner. The report states that Binance US allegedly attempted to establish connections with several specific banks following the collapse of the three US crypto banks. The Ostroff, Louise Ensign and Osipovich report adds:
Binance US has unsuccessfully sought to establish direct banking relationships with banks, including Cross River Bank, the New Jersey-based lender that services some crypto and fintech companies, and Customers Bancorp Inc., a Pennsylvania-based regional bank. , in recent months, people said.
The reporters further spoke with a Binance US spokesperson, who stated: “We work with multiple US-based banking and payment providers and continue to onboard new partners while updating our internal systems to create a more stable fiat platform and offer services. additional”. It is not clear if other cryptocurrency firms are facing similar problems finding banking partners, but cryptocurrency exchange Bittrex recently shut down its operations in the US, citing excessive regulatory oversight in the United States as the reason for the shutdown.
On March 27, the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance Holdings Ltd., the parent company of Binance US, alleging derivatives and trading rule violations. The lawsuit also includes Binance CEO Changpeng Zhao (CZ) and the company’s former chief compliance officer, Samuel Lim. The WSJ report on Saturday indicated that “among the reasons some banks were hesitant to do business with Binance US was concern about regulatory risk,” according to sources familiar with the matter.
What do you think the future holds for cryptocurrency exchanges in terms of partnering with traditional banking institutions, especially in light of increased regulatory scrutiny? Share your thoughts in the comments section below.
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