Crypto behemoth Binance Holdings Ltd. is contemplating severing its ties with its business partners in the United States as the pressure from regulators increases amid several high-profile crypto crackdowns in the country.
Binance Considers U.S. Withdrawal?
According to latest reports, the company which operates the largest cryptocurrency exchange in the world, is considering making the withdrawal after its relationships with a key banking partner and stablecoin issuer ran into trouble in the face of intense scrutiny from authorities. Investigations of the cryptocurrency exchange Binance have been carried out by the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission, the Justice Department, and the Internal Revenue Service.
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The report states that Binance Holdings is re-evaluating its venture capital investments in the United States and is considering whether or not it should cut its relationships with intermediate corporations such as banks and services organizations. According to the report, it is considering de-listing tokens from any US-based projects, which would include Circle’s stablecoin, USD Coin (USDC).
However, CZ has come out in the open to publicly denounce the delisting rumor by calling it “false”.
4. False. https://t.co/qjqLrx3TGF
— CZ 🔶 Binance (@cz_binance) February 17, 2023
Reacting to the news, the price of USDC remained stagnant to its $1 peg with a current market capitalization of $41 billion.
Binance’s Growing Concerns
The U.S. government has not granted Binance Holdings permission to provide cryptocurrency exchange services to local customers. Instead, it relies on Binance.US, another exchange which is significantly smaller but asserts that it is autonomous. Moreover, Binance states that it does not intend to relocate its operations outside of the United States as of now.
Binance Chief Executive Officer Changpeng Zhao, commonly referred to as “CZ”, signaled the potential retreat earlier this week. He was quoted as saying:
Given the ongoing regulatory uncertainty in certain markets, we will be reviewing other projects in those jurisdictions to ensure our users are insulated from any undue harm.
This comes after Paxos Trust Co. announced it would stop issuing Binance-branded stablecoin BUSD. In light of the regulatory crackdown brought on by the failure of cryptocurrency exchange FTX, Binance Holdings won’t be the first company dealing in digital assets to withdraw from the market. Following the receipt of orders to cease and desist from a number of states, Nexo Inc. made the announcement in December that it intended to withdraw all of its products and services from the US market.
Earlier this month, Binance temporarily halted both the deposits and withdrawals of US dollars using bank accounts for its customers after Signature Bank withdrew its support. And, according to a report that was covered by CoinGape on Thursday, Binance moved more than $400 million out of a bank account belonging to the exchange during the first quarter of 2021.
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