Binance, the cryptocurrency exchange facing a lawsuit by the US Securities and Exchange Commission (SEC), says its users will no longer be allowed to deposit funds using US dollars.
Additionally, the world largest crypto exchange warned its customers that withdrawals with US dollars will also be suspended in the next week.
The move comes after SEC regulators filed a motion in federal court Tuesday to freeze Binance's US assets as the SEC lawsuit proceeds.
Binance called the motion "unwarranted," saying it had addressed SEC concerns over the safety of customer assets.
“The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry, Binance.US tweeted to its 400K followers Thursday.
“In an effort to protect our customers and platform, today we are suspending USD deposits and notifying customers that our banking partners are preparing to pause fiat (USD) withdrawal channels as early as June 13th, 2023,” BinanceUS said.
The crypto exchange noted that crypto-denominated trading, deposits, withdrawals, and "staking" — where users deposit cryptocurrencies for use in blockchain transactions — would remain fully operational.
Binance.US said the suspension is part of a plan to change the platform to a "crypto-only exchange."
The world's largest crypto exchange did not reveal who its banking partners are, but encouraged customers to take appropriate action with their US dollars, providing specific details on what customers should do and expect following the suspension.
On June 5th, the SEC filed suit against Bianace for a string of violations, calling the world’s biggest crypto exchange “an extensive web of deception.”
Binance founder and CEO Changpeng Zhao, as well as the operator of its US exchange, were also named in the lawsuit.
Among the 13 charges, the SEC claims Binance artificially inflated its trading volumes, diverted customer funds, failed to enforce restrictions on US customers, and provided misleading information to investors regarding market surveillance controls.
Marking a dramatic crackdown on the crypto industry, the SEC filed a lawsuit against the US crypto exchange Coinbase the next day.
In that lawsuit, the SEC accuses Coinbase, the world’s second largest crypto exchange, of operating illegally because it failed to register as an exchange.
The SEC said that Coinbase traded at least 13 crypto assets that should have been registered as securities, putting investors at risk.
In a response to the filing, Coinbase said the company will continue operating as usual and has "demonstrated commitment to compliance."
Binance.US, who claims to have worked with SEC regulators “in good faith” over the past two and a half years, said the lawsuit “is the latest example of regulation by enforcement under the current Commission.”
“To be clear, we believe the lawsuit is baseless and we intend to defend ourselves vigorously,” it said.
In 2022, statistics show that there were a total of over 200 million users worldwide registered between the two crypto exchanges.
Also on Friday, Robinhood Markets said it was removing three cryptocurrency tokens from its platform effective June 27th in response to the SEC crackdown.
The tokens are Solana, Cardano, and Polygon.
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