A recent tweet states that Binance’s U.S. division faces challenges finding a suitable new banking partner. The objective is to see a financial institution that can securely handle the cash deposits made by Binance users.
According to reports, Binance has tried to come to agreements with numerous banks in the U.S. However, the largest cryptocurrency exchange platform by market cap has received reluctant messages from the banks. Some of the banks that Binance U.S. has reached recently are the Cross River Bank and Customers Bancorp Inc.
The refusal of banking partners to work with Binance U.S. is primarily due to the current regulatory landscape surrounding digital currencies in the country. The regulations were tightened after the collapse of FTX, where the CEO, Sam Bankman-Fried (SBF), was found to have misused customer funds. This event led to a regulation shift, making banks more cautious about partnering with cryptocurrency companies like Binance.
CFTC Sues Binance U.S. and Changpeng Zhao
Last month, the U.S. Commodity Futures Trading Commission (CFTC) sued Binance along with its CEO Changpeng Zhao (C.Z.) and former top compliance executive, alleging that they were operating an “illegal” exchange and a “sham” compliance program. Binance U.S Partner.
Investors have pulled $1.6 billion out of Binance since the lawsuit. It is unclear how the legal action would affect Binance’s future operations, but it has undoubtedly heightened scrutiny of the exchange.
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