In a recent report, the Binance.US exchange has announced to its customers that withdrawals in the United States Dollars are temporarily suspended, adding that they can convert their funds into stablecoins like USDC or other crypto assets to withdraw from their accounts.
According to the report, the prominent crypto exchange in the United States, Binance.US, has notified its customers about the recent updates in its terms of operations. In the notice, it pointed out that clients may no longer have access to direct withdrawals in USD as the exchange no longer supports the American fiat currency.
In addition, the crypto exchange stated in its announcement that the new development in its service terms mainly affects the BAM Fiat Wallet section, which is the firm’s USD custody services. In the modified terms, the exchange highlighted other alternatives for customers to withdraw. Users can either use stablecoins pegged to USD, such as USDT, USDC, etc., Or withdraw from their accounts via other crypto assets like Bitcoin, Ethereum, etc.
Binance.US Notifies Its Customers
Shortly after the announcement, some customers reportedly expressed worries over the authenticity of the news. However, some crypto enthusiasts confirmed the new development, claiming on Twitter that Binance.US has modified its terms as announced. They added that as Binance now seizes USD transactions, it gives room for other crypto asset transactions such as Tether and Circle USD, Bitcoins, Ethereum, and other shitcoins, according to the report.
In its announcement, Binance.US pointed out, just as it did in previous updates, that crypto assets are not under the insurance protection program of the FDIC ( Federal Deposit Insurance Corporation). Additionally, the report should be that on May 5th, 2023, Binance.US had informed its users that in a scenario where it terminated its relationship with a USD custody provider and couldn’t secure another USD custodian soon enough, it would duly notify its customers to withdraw their USD deposits within a given deadline to avoid any issue.
Furthermore, the firm asserted that any USD deposit that remains in the user’s wallet after the deadline date set in the notice would be automatically swapped with stablecoins and deposited in the user’s crypto account.
FDIC Insurance does Not protect BAM
However, the report pointed out that there is a significant difference between the two notices Binance.US published in May and October. In May, the firm stated that its operator, BAM, was not an associate of FDIC nor a bank, claiming that it is just an affiliate of USD custodians that ensure custodians hold users’ USD deposits in their omnibus accounts in banks issued by the FDIC. But, this particular information is no longer on Binance.US’ recently modified terms.
Furthermore, the May service terms upgrade clarified that the FDIC offers an insurance coverage limit of about $250 000 for each eligible person, and it is the work of Binance.US to ensure funds meet up with the requirement, which would only be activated when a bank faces insolvency. In a case where the bank collapsed, there is a possibility that your account balance in the bank alongside the fiat would be evaluated to determine your eligibility for deposit insurance. Nonetheless, the BAM failure or any of its employee’s misconduct is not under the coverage of the FDIC.
Binance.US Faces USD Deposit Issues Often
Crypto speculators suggested that the current wavering positions of the Binance.US on US dollars show that the firm is struggling to maintain its fiat off-ramps and on-ramps. In addition, the report revealed that the firm had been having issues with USD for some time now. For instance, in June 2023, the crypto firm informed its users of its temporary suspension of deposits in USD and also notified them of a possible goal in USD withdrawal, urging them to make withdrawals as soon as possible.
However, shortly after the announcement, Binance.US reportedly issued a public statement, telling its customers that it had resolved the US dollar withdrawal issue. But it emphasized that the solution could be temporary. Indeed, it was a quick solution as the firm has again suspended withdrawal in US dollars.
Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.
