Binance.US suspends USD deposits after regulatory intervention

June 8 (Reuters) ̵[ads1]1; Crypto exchange Binance.US said on Thursday it is suspending U.S. dollar deposits and its banking partners are preparing to pause fiat dollar withdrawal channels as early as June 13, just days after U.S. regulators sued Binance and its CEO Changpeng Zhao.

The U.S. arm of the world’s largest crypto exchange said in a tweet at 10:33 p.m. EDT (0233 GMT) Thursday that the move comes as it takes “proactive steps” in transitioning to a crypto-only exchange for the time being.

Crypto trading, betting, deposits and withdrawals will remain fully operational, the exchange said in a message to its customers.

On Monday, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its founder Zhao, then sued Coinbase ( COIN.O ), the largest US cryptocurrency platform, a day later.

The development marks a dramatic escalation of a crackdown on the industry by US regulators, following the implosion of FTX last year.

Earlier on Thursday, US financial regulators said they support a freeze on Binance’s assets, according to a US SEC filing with a federal court and made public.

“Binance.US is a significantly smaller business than their international group. Halting withdrawals will obviously create or incite some concern and panic,” said Matthew Dibb, COO of Singapore crypto platform Stack Funds.

“But day after day for the past week, Binance has been hit with various kinds of comments and issues from the SEC and regulators, so this was really to be expected.”

Binance.US said in its tweet that the SEC’s perception of cryptocurrency is “extremely aggressive and intimidating,” adding that it has created challenges between the exchange and its banking partners.

“This is going to be a long battle, it’s not going to be resolved in the next two or three months, it’s most likely going to take a few years,” Dibb said.

Reporting by Rae Wee in Singapore and Rahat Sandhu in Bengaluru; Editing by Dhanya Ann Thoppil & Shri Navaratnam

Our standards: Thomson Reuters Trust Principles.

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