Key facts:
- Binance has sought to partner with other banks in the US but has been turned down.
- The exchange is facing a lawsuit for violating various US laws.
The US subsidiary of the Binance exchange seems to be finding it difficult to maintain the transactions of its users in that country after the crisis affected the banks with which it operated.
The exchange’s problem has affected the process of sending and moving funds from its users since user deposits in dollars were sent to Signature Bank or Silvergate Capital banks, both declared bankrupt last March, according to a WSJ source.
In the case of Signature, it was tapped by New York state authorities to “protect depositors,” according to the Department of Financial Services (DFS). While Silvergate was voluntarily liquidated in accordance with the applicable regulatory processes, facts reported by Market Times.
This scenario has left Binance and other cryptocurrency companies without banking partners in the United States, so they have had to resort to other intermediaries that slow down the processes.
The search for a bank to help the exchange streamline processes and transactions has been unsuccessful. The company has knocked on the doors of banks such as Cross River Bank, which services some cryptocurrency companies, and Customers Bancor, though all without success.
For the world’s largest-trading cryptocurrency exchange, one of the biggest hurdles it has encountered has been getting a bank to hold its customers’ dollars directly, a person familiar with the matter said.
“We work with multiple US-based banking and payment providers and continue to add new partners while updating our internal systems to create a more stable fiat platform and offer additional services,” a Binance.US spokesperson said.
Binance Faces Legal Issues in the US
However, this is not the only problem facing the representation of Binance in the United States. Recently, the regulators of that nation sued the company for allegedly violating various regulations, among which it is accused of manipulating the market for its convenience, as reported by this medium.
For his part, the CEO and founder of the Binance exchange, Changpeng Zhao (CZ), denied the accusations and said that the company cooperates with regulators and law enforcement, so he found the complaint “unexpected and disappointing”.
