Binance.US, the U.S. affiliate of the global Binance exchange, announced that it would suspend dollar deposits this week. This follows on from increased regulatory pressure from the U.S. Securities and Exchange Commission (SEC). In a tweet on Thursday, Binance.US revealed that its banking partners were preparing to cease dollar withdrawal channels starting June 13.
The move comes after the SEC sought a court order to freeze Binance.US’s assets. Customers have until Tuesday to withdraw their funds. The global exchange expressed its dismay at the approach of the SEC on June 9. It encouraged people to take appropriate action with their USD held on the platform.
The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry. https://t.co/AZwoBOgsqS and our business partners have not been spared in the use of these tactics, which has created… pic.twitter.com/rlIe6swIoY
— Binance.US 🇺🇸 (@BinanceUS) June 9, 2023
The SEC lawsuit accuses Binance of manipulating trading volumes, mingling customer assets, and other civil charges, which Binance denies.
In a similar vein, Robinhood Markets (HOOD.O) announced that it would delist three crypto tokens from its platform, including Cardano and Solana. The delisting follows the SEC’s identification of these tokens as securities in its lawsuit against Binance and a separate action against Coinbase (COIN.O). This move indicates that the SEC’s legal actions are already impacting the broader crypto market.
The SEC filed a lawsuit against Binance, its CEO Changpeng Zhao, and Binance.US on Monday, alleging multiple charges of deceptive practices, inflated trading volumes, and misappropriation of customer funds. The SEC claims that Binance and Zhao maintained secret control over the U.S. entity while publicly portraying it as independent. Binance argues that the SEC’s jurisdiction is limited as it is not a U.S. exchange.
In its filing on Tuesday, the SEC requested a federal court to freeze Binance’s U.S. assets, including over $2.2 billion in customer assets held in crypto and approximately $377 million in U.S. dollar bank accounts. The SEC expressed concerns that Binance could potentially move these funds offshore. Binance.US labeled the motion as “unwarranted.”
Binance.US stated that the SEC’s actions have presented challenges for its financial service providers, leading the exchange to no longer accept dollar deposits. Instead, Binance.US plans to transition into a “crypto-only exchange.”
The recent lawsuits by the SEC against Binance and Coinbase expand the number of cryptocurrencies identified as securities. In response, Robinhood announced it would remove these three coins from its platform starting June 27, including Solana, Cardano, and Polygon.
The lawsuits have introduced uncertainty surrounding these assets, leading Robinhood to end support for them, as stated in a tweet by the company. It is likely that other U.S. crypto exchanges will face scrutiny as a result of the SEC’s actions this week.
From CEX to DEX Trading
Following the announcement of the SEC lawsuits decentralized exchanges saw an increase of 88% in volume of transactions. According to data from CoinGecko platform, decentralized crypto exchanges had a total 24h trading volume of $3.01 Billion, a 110.07% change in the last 24 hours. Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum), and PancakeSwap v3 (BSC) make up a significant majority of all trading on decentralised exchanges.
Furthermore, Curve, a DEX specializing in stablecoin trading with Ethereum, witnessed an incredible 143.01% spike in trading volume in the last 24hrs. There are 74 coins and 100 trading pairs available on the exchange.
As DEX volumes experienced a surge, Binance US saw net outflows. However, it’s important to note that the current net outflows remain significantly lower than the exchange’s total reserves, which currently stand at over $8 billion in stablecoin balances at the time of writing.
