Binance.US Loses FDIC Insurance, Stops USD Withdrawals

18/10/2023

Binance's U.S.-based subsidiary, Binance. US, has lost its FDIC-insured status, according to an email sent to its customers. The updated terms of use for the exchange no longer offer insurance for crypto deposits. The email states that digital assets are not legal tender and are not backed by any government, and accounts and value balances are not subject to protections or insurance provided by the FDIC or the Securities Investor Protection Corporation (SIPC). As a result, users must convert their fiat U.S. dollars in their accounts to stablecoins or other digital assets to withdraw their crypto holdings. Previously, Binance. US accounts were insured up to $250,000 per person.

This development comes amid increased regulatory scrutiny and actions against Binance by U.S. regulators, particularly the Securities and Exchange Commission (SEC). Binance's CEO, Changpeng Zhao (CZ), has criticized the regulators for their actions against Binance and its U.S. subsidiary. The SEC has accused Binance. US of failing to cooperate with a consent order in an ongoing lawsuit. The exchange claims that the SEC's recent requests are unreasonable. This situation underscores the challenges faced by crypto exchanges operating in the United States, as regulators seek to enforce compliance with financial regulations.

Resource: https://coingape.com/binance-us-loses-its-fdic-insured-status/