Binance’s U.S. subsidiary pauses dollar deposits in wake of SEC lawsuit, says it’s becoming a ‘crypto-only exchange’

In a tweet on Thursday at 10:33 p.m. ET, the exchange said that due to the Securities and Exchange Commission lawsuit filed against its parent company earlier this week, its payment and banking partners had decided to pause “USD fiat channels.” Because of this, the U.S. exchange will soon have no way to deal in U.S. dollars.

The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry. https://t.co/AZwoBOgsqS and our business partners have not been spared in the use of these tactics, which has created… pic.twitter.com/rlIe6swIoY

— Binance.US ???????? (@BinanceUS) June 9, 2023

Instead, Binance.US said in the tweet that it would transition to operating as a “crypto-only exchange.” 

Users have until June 13 to withdraw any U.S. dollars from the platform, and after June 15, any dollars remaining on the platform may be converted to stablecoins, Binance.US said in a tweet. “Until we secure more stable banking partners, Binance.US will remain a crypto-only exchange—at least for a time.”

On Monday, Binance was sued by the SEC, which alleged it broke U.S. securities laws. The company was hit with 13 charges, including mishandling customer funds and offering unregistered securities. The company also was accused of courting U.S. customers to use the main Binance platform when those investors were restricted to Binance.US. On Tuesday, the SEC asked a federal judge to freeze the assets belonging to Binance.US.

The SEC sued Coinbase a day after Binance, and in just 24 hours both platforms saw $1 billion in negative outflows, according to data from blockchain analytics company Nansen. Following the announcement on Thursday, Bitcoin was trading at a slight discount on Binance.US, according to Coindesk.

Binance.US assured customers that their assets were fully backed by reserves and said that the SEC’s charges against it were unjustified, adding in a tweet that “we will continue to vigorously defend ourselves, our customers, our partners, and industry.”