Binance’s US Arm Struggles to Find Bank to Take its Customers’ Cash – According to sources familiar with the matter cited by the Wall Street Journal on Saturday, the American branch of Binance, a cryptocurrency exchange, is facing difficulties in securing a financial institution to manage its clients’ funds following the collapse of Signature Bank last month.
As per the report, Binance’s US division had been sending deposits to Signature Bank and Silvergate Capital Corp, both of which were considered friendly towards cryptocurrencies. However, since both banks have experienced setbacks, Binance is now in a hurry to locate a new banking partner. The report notes that Binance.US is utilizing at least one intermediary to store its funds, and this may cause delays in sending and transferring funds since the money is being held by a third party.
According to the report, Binance has attempted to build partnerships with Cross River Bank and Customers Bancorp Inc, but these attempts have not been successful. Banks are said to be hesitant due to concerns about regulatory risk. “We work with multiple U.S.-based banking and payment providers and continue to onboard new partners while upgrading our internal systems to create a more stable fiat platform and offer additional services,” a spokesperson for Binance.US told the WSJ.
In recent developments, it was reported that the U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance, its CEO, and former top compliance executive, claiming that they were operating an “illegal” exchange and a “sham” compliance program. This has led to a loss of trust amongst investors, causing a withdrawal of $1.6 billion from Binance.