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Binance cannot find a bank to work with it in the US, reports claim.
Banking troubles came as Binance faces a potentially fatal lawsuit with the CFTC.
The lack of banking partners caused disruptions for Binance.US customers.
Binance’s recent regulatory troubles are causing major issues for its business in the US. After the exchange’s recent lawsuit with the CFTC, the exchange struggles to find banking partners. Without banking partners, Binance cannot effectively serve its US customers.
At least two banks turned down Binance.US business in recent months, WSJ reported on Saturday. Cross River Bank and Customers Bancorp Inc. both declined to do business with the exchange, citing regulatory concerns.
Binance’s prior US banking partners, Signature Bank, and Silvergate, both failed earlier this year. The failure of two crypto-friendly banks left Binance.US scrambling to find at least one banking partner in the US.
In the meantime, Binance.US relies on several crypto-services and a fintech Prime Trust LLC to store user funds. However, this is not a long-term solution for the exchange and has already caused disruptions to Binance services.
Without banking partners, Binance.US cannot effectively serve its customers. For instance, Binance.US customers reported troubles with withdrawing their fiat currency from the exchange. Binance.US also no longer supports wire deposits and Apple Pay and Google Pay deposits.
Binance Facing Major Lawsuit With CFTC
Binance.US banking issues likely stem from Binance’s recent troubles with US regulators. The world’s largest cryptocurrency exchange faces a lawsuit from Commodity Futures Trading Commission (CFTC)
The CFTC alleges that Binance offered unregistered derivatives to US investors. The lawsuit also alleges that Binance participated in market manipulation and used its position to trade against its users.
Other US crypto exchanges, such as Coinbase, continue to work with US banks. On March 13. USDC issuer and Coinbase partner Circle added Cross River as a banking partner.
On the Flipside
The reluctance of banks to work with crypto could eventually lead to crypto companies starting their own decentralized services to replace banks.
The US banking system has seen a surge of bank runs in recent months. Crypto supporters are touting a decentralized alternative to fix the current system.
Why You Should Care
Binance’s inability to find banking partners highlights the centralization of the financial system in the US.
Read about Binance’s recent lawsuit with the CFTC.
Binance Lawsuit Explained: Why CFTC Involvement Is a Big Deal
Read about Thailand’s recent proposal to stimulate the economy with digital programmable money.
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