Binance.US solves USD withdrawal issues but warns it won’t last long

June 23, 2023 Coin Telegraph

Banks

“While USD withdrawal remains fully operational on the platform today, we expect our banking partners to discontinue that service in the near future,” said Binance.US.

U.S. crypto exchange Binance.US has informed customers it has resolved its U.S. dollar withdrawal issues after working with its banking partners but warns the relief may not last.

The reportedly independent subsidiary of crypto exchange Binance told customers in a June 22 update that its system remains fully operational and that USD withdrawal requests are expected to go back to their normal five-business-day turnaround.

On June 9, the exchange suspended dollar deposits and notified its customers of an incoming pause to fiat withdrawal channels amid its ongoing battle with the Securities and Exchange Commission.

At the time, it also warned customers that its banking partners were preparing to pause fiat (USD) withdrawal channels as early as June 13, however, that didn't end up coming to pass as yet.

In its most recent statement, Binance.US has encouraged any customers that have a failed withdrawal attempt to resubmit their requests “as our systems remain fully operational,” but cautioned that the relief may not be permanent.

“While USD withdrawal remains fully operational on the platform today, we expect our banking partners to discontinue that service in the near future.”

Binance.US is also encouraging its users “use, withdraw, or convert your USD to a stablecoin to continue crypto-to-crypto trading,” as it transitions to a crypto-only exchange.

Reminder: As we transition to a crypto-only exchange, https://t.co/gM6e3xb9BX will remove select USD Advanced Trading pairs from our platform on 6/26 at 8 p.m. PDT / 11 p.m. EDT.

While USD withdrawals remain fully operational, we encourage you to use, withdraw, or convert your… pic.twitter.com/LWDWVvwtoq
— Binance.US Customer Support (@BinanceUShelp) June 22, 2023

Any remaining USD balances held in customer accounts could be converted into Tether (USDT) at a future date, it noted.

The announcement also included details of more USDT trading pairs with ANKR, DAI, DASH, HBAR, ICX, IOTA, RVN, WAVES, XNO, XTZ, and ZIL being added on June 26.

However, it noted that it will remove most “USD Advanced Trading pairs” from the platform on the same date. Of the 150 crypto assets that Binance.US supports, only BTC, ETH, ADA, BNB, LTC, MATIC, SOL, VET, USDC, and USDT will be tradable against the dollar.

The company has also had problems with banking partners in Australia. In May, Bitcoin prices fell to a 20% discount on the Australian branch of Binance when local banking and payments partners suspended their services causing a rush to sell and cash out.

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Voyager app set to reopen for customer withdrawals as soon as June 20

June 15, 2023 Coin Telegraph

3AC

Customers will soon be able to load up the Voyager app and see how much will be available for withdrawal.

Cryptocurrency brokerage Voyager Digital is preparing to reopen its app and allow customers to finally withdraw their funds — nearly one year after it filed for Chapter 11 bankruptcy.

Voyager's bankruptcy plan administrator Paul Hage said in a June 14 court filing that around June 15 the Voyager app would be updated to show the amount available for withdrawal, and estimated that the withdrawal period would start somewhere between June 20 and July 5.

The bankruptcy plan was first approved in court on May 17 and will result in customers initially receiving 35.72% of their claims by withdrawing crypto through the Voyager app or in cash after 30 days.

Voyager Court adjourned for the day
Fee examiners findings approved by the judge
App will come back online on or around 15 June
Estimated window for withdrawals opening 20 June to 5 July
30 days to withdraw once window opens
all creditors will receive 35.72 initial…
— Neville (@neville_p) June 14, 2023

Within the filing, Hage also noted that bankrupt crypto hedge fund Three Arrows Capital still owes Voyager $650 million, so while this first tranche of withdrawals allows for just over 35% of customer funds to be withdrawn “the primary focus will shift to recovering additional assets that can be distributed to creditors” once the initial distribution is completed.

Additionally, an extra $445 million of customer funds could also be made available to creditors pending a final resolution of Alameda Research’s preference claim against Voyager, which is not expected to happen until at least mid-September 2023.

Meditation between @investvoyager and @FTX_Official is anticipated to not start until Fall 2023

Anything less than 100% return would be a devastating result for Voyager creditors! pic.twitter.com/Y6IDAOgeT7
— EthDaddy ‍☠️ (@ETHjuiced) June 14, 2023

After originally filing for bankruptcy on July 5, Voyager had submitted two prior bankruptcy plan proposals but both had fallen through.

The first of these was to the United States arm of FTX, FTX.US, but the $1.4 billion deal fell through after FTX filed for bankruptcy.

Subsequently a $1 billion deal with Binance.US also fell through after it backed out on April 25, citing a “hostile and uncertain regulatory climate in the United States.”

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SEC and Binance.US to negotiate deal avoiding total asset freeze

June 14, 2023 Coin Telegraph

Binance court case

United States District Judge Amy Berman Jackson has ordered the two entities to work toward a compromise.

Binance.US and the United States Securities and Exchange Commission have agreed to work on an arrangement that will allow the exchange to avoid freezing all of its assets.

On June 14, Bloomberg reported that U.S. District Judge Amy Berman Jackson referred the two organizations to a magistrate judge to work toward a compromise arrangement to protect customer funds without having to shut down the exchange.

“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general,” Jackson said at a June 13 hearing.

Judge Jackson noted she wouldn’t come to a final decision on the SEC’s motion for a temporary restraining order until the two parties had worked through the situation with the magistrate.

An update on the negotiations made with the magistrate has been scheduled for the end of business hours on June 15.

Additionally, she noted the SEC and Binance.US seemed “not that far apart” when it came to reaching an agreement on the matter.

Before Judge Jackson reached her decision at the hearing, former SEC enforcement attorney John Read Stark informed his 20,000 Twitter followers that there is “a lot of conflict between what each party” wanted to get out of the hearing.

SEC/Binance Newsflash: Dueling Consent Orders (Read Them Now)

The SEC and the Binance defendants have each submitted draft orders of what each party wants the Judge to order in the SEC/Binance Emergency Asset Freeze Enforcement Action.

There is obviously a lot of conflict… pic.twitter.com/UWjXSgL5lR
— John Reed Stark (@JohnReedStark) June 13, 2023

“That does not mean the judge cannot order a compromise and find common ground,” Stark explained.

The SEC filed an emergency motion for a temporary restraining order on Binance.US on June 6, after accusing Binance CEO Changpeng “CZ” Zhao of being able to access Binance.US customer funds.

The regulator alleged Zhao moved $12 billion of Binance’s funds through an entity he controlled called Merit Peak.

In a June 12 joint memorandum submitted ahead of the hearing on the restraining order, both Binance.US and Zhao denied the claims that funds were ever mishandled. They accused the SEC of being “unable to identify a single instance” in which Binance.US customer funds were ever misused.

“Indeed, there is no ‘emergency’ here at all, other than the one manufactured by the SEC for its own purposes.”

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Binance.US Halts US Dollar Deposits Over Banking Challenges, Says It Will Temporarily Be a Crypto-Only Exchange

June 9, 2023 The Daily Hodl

Breaking: Binance.US suspends USD deposits, warns of fiat withdrawal pause

June 9, 2023 Coin Telegraph

Binance.us

Binance.US said the moves are part of efforts to protect customers and the platform amid "extremely aggressive and intimidating tactics" by the SEC.

Binance.US has announced the suspension of U.S. dollar deposits and has notified its customers of an incoming pause to fiat (USD) withdrawal channels as early as June 13.

On June 9, Binance.US announced that it was forced to take action amid “extremely aggressive and intimidating tactics” from the United States Securities and Exchange Commission.

The firm noted that, in an effort to protect its customers and platform, it is suspending USD deposits. Furthermore, Binance.US is “notifying customers that our banking partners are preparing to pause fiat (USD) withdrawal channels as early as June 13, 2023.”

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 company added that it plans to transition to a crypto-only exchange but maintains a 1:1 ratio for customer assets.

The notice also cautioned that any downtime in processing withdrawals going forward “may be the result of elevated volumes and weekend bank closures.”

Trading, staking, deposits and withdrawals in crypto remain fully operational, it confirmed.

As a result of the SEC’s “ideological campaign against the American digital asset industry,” Binance.US and its banking partners have faced increasing challenges, it said. Those banking partners have signaled their intent to sever fiat on-ramps to the exchange.

USD deposits will be suspended as of June 9 and USD trading pairs will be delisted next week, the firm stated, however, it will continue to support USDT (Tether) trading pairs. It stated that any USD left on the exchange may be converted into a stablecoin that can be withdrawn on-chain.

Ten trading pairs delisted by Binance.US. Source: Binance.US

Binance.US delisted ten trading pairs on June 8, eight BTC pairs and two BUSD pairs, while noting that OTC Trading Portal services were paused. BTC traded at a premium on the U.S. exchange in early May.

The SEC issued an emergency order on June 6 to freeze the assets of Binance.US. The following day, the firm reassured customers that assets remained safe adding that the platform continues to be fully operational with deposits and withdrawals functioning as normal.

Cointelegraph reported on the struggles Binance.US was having securing banking partners in April.

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Meet the judges that will preside over Coinbase and Binance’s SEC lawsuits

June 8, 2023 Coin Telegraph

Binance.us

One judge has ruled on a key crypto case of late, while the other has ruled on high-profile political cases in the United States in recent times.

Court filings have revealed the names of the two United States District Court Judges that will preside over the Coinbase and Binance lawsuits brought against them by the U.S. Securities and Exchange Commission.

The case of SEC v Coinbase will be heard by District Court Judge Jennifer H. Rearden in the Southern District of New York, filings show.

Meanwhile, District Court Judge Amy Berman Jackson will tackle the case of SEC v Binance in the District of Columbia, according to recent filings.

SEC v Coinbase: Judge Jennifer H. Rearden

Rearden, aged 53, was nominated by President Joe Biden to be a United States district judge in January 2022. She was confirmed by the Senate last September.

While Rearden’s tenure has been fairly short, she recently ruled on a crypto-related matter which involved a brush with Binance.US.

On March 27, Rearden approved the U.S. DOJ’s emergency motion to temporarily halt a $1.03 billion deal between Binance.US and the bankrupt crypto lending platform Voyager Digital.

The decision meant that impacted Voyager customers would have to wait longer to be paid out.

Rearden applied the “balance of hardship” test to arrive at the decision in favor of the U.S. government:

*Judge Rearden considered the public interest to be more at risk than the sovereign interests of Voyager customers. Source:* *CourtListener*

This later proved to be a deal breaker for Voyager, with Binance.US pulling out of the deal a month later, blaming a “hostile and uncertain regulatory climate in the United States” for its change in heart.

Voyager’s bankruptcy plan was finally approved on May 17 — however not by Rearden.

Prior to serving as a judge, Rearden worked as a commercial litigator and received her Juris Doctorate from New York Law School in 1996.

It should be noted that a judge's background, experience, or previous rulings in other cases are not an indication of the outcome of future cases.

SEC v Binance: Judge Amy Berman Jackson

Judge Jackson, aged 68, was appointed as a United States District Judge in March 2011 by then-U.S. President Barack Obama. Prior to that, she received her Juris Doctorate from Harvard Law School.

While Jackson has provided opinions in 888 cases, it appears that none of them have related to cryptocurrency-related disputes.

The SEC v. @Binance case has just been assigned to D.C. Judge Amy Berman Jackson.

Judge Berman Jackson previously served as a federal prosecutor, but she has also worked on the criminal defense side.

She was appointed to the bench by President Obama in 2010.

She has presided…
— MetaLawMan (@MetaLawMan) June 7, 2023

She has, however, adjudicated on several highly political disputes in recent times.

Jackson sentenced Paul Manafort Jr and Roger J. Stone Jr — former advisers and friends of former U.S. President Donald Trump — to 43 and 40 months imprisonment, respectively, over a series of charges related to a Russia investigation in 2019.

Trump shared negative sentiment towards Jackson and her decision.

Is this the Judge that put Paul Manafort in SOLITARY CONFINEMENT, something that not even mobster Al Capone had to endure? How did she treat Crooked Hillary Clinton? Just asking! https://t.co/Fe7XkepJNN
— Donald J. Trump (@realDonaldTrump) February 12, 2020

In May, Jackson approved a motion filed by the U.S. Department of Justice to block a deposition of Trump that was related to two other lawsuits filed by former FBI officials.

Jackson served as an assistant U.S. attorney in D.C. between 1980-1986.

While there, she received Department of Justice special achievement awards for her work on several high-profile murder and sexual assault cases.

The SEC sued Binance on June 5 and Coinbase on June 6, alleging the exchanges broke various securities rules, most notably for purportedly offering cryptocurrencies that the regulator considers to be unregistered securities.

Binance was accused of operating illegally in the United States.

Binance and Coinbase have both confirmed they will “vigorously” defend the lawsuits laid against them.

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Binance.US coins trade at premium amid litigation fears, fiat gateway issues

June 7, 2023 Coin Telegraph

Binance.us

Stablecoins such as USDT and USDC were trading for 3% to 4% higher than par value at the time of publication.

On June 7, multiple coins and tokens listed on Binance.US, the U.S. subsidiary of cryptocurrency exchange Binance, began deviating from their fair value to trade at premiums. Coins such as Bitcoin (BTC) and Ether (ETH) were priced at $27,445 and $1,911, respectively, compared to CoinMarketCap averages of $26,490 and $1,850.

Meanwhile, stablecoin tokens such as Tether (USDT) and USD Coin (USDC) broke their par value to trade at $1.03 and $1.04, respectively. The same day, Binance.US removed over a dozen USDT-based trading pairs, paused its over-the-counter trading portal, and limited the maximum trade amount of its buy, sell, and convert services to $10,000.

In addition, according to its support page, Binance.US wire deposits were stated as "temporarily unavailable," while withdrawals are "functioning normally." However, the exchange also stated that U.S. dollar-based payment methods, including debit cards, Apple Pay, and Google Pay, were also temporarily available for some users due to "channel switching."

*Ongoing issues with Binance.US fiat gateway.*

Aside from funding issues, investors were also stirred by a U.S. Securities and Exchange Commission (SEC) emergency motion to freeze Binance.US' assets and repatriate funds held by U.S. customers. In response, Binance staff wrote:

"User assets remain safe and secure and the platform continues to be fully operational with deposits and withdrawals functioning as normal."

On June 5, the SEC sued Binance, alleging the operations of an unregistered exchange in the U.S. along with the sale of unregistered securities. The commission also accused the exchange of "commingling" and "diverting" investors' funds. Changpeng Zhao, CEO of Binance, received a civil summons to respond to the allegations on June 7.

Magazine: US and China try to crush Binance, SBF’s $40M bribe claim

Binance.US says user funds ‘remain safe’ amid SEC attempt to freeze assets

June 7, 2023 Coin Telegraph

Binance

The U.S.-based exchange said it is “fully operational” and called the Securities and Exchange Commission’s motion “unwarranted.”

Crypto exchange Binance.US has attempted to quell possible unrest from its users following a motion from the United States securities regulator seeking to freeze its assets “on an expedited basis.”

In a June 6 tweet, Binance.US reiterated that “user assets remain safe and secure" and added the platform “continues to be fully operational with deposits and withdrawals functioning as normal.”

Earlier on June 6, the SEC filed an emergency motion in the District of Columbia U.S. District Court asking for a temporary restraining order against Binance, Binance.US and Binance CEO Changpeng Zhao (CZ), requesting eight actions.

This afternoon, the SEC filed a motion seeking a TRO and preliminary injunction against https://t.co/AZwoBOgsqS attempting to, amongst other things, freeze https://t.co/AZwoBOgsqS corporate assets. User assets remain safe and secure and the platform continues to be fully…
— Binance.US (@BinanceUS) June 6, 2023

The requested actions include the freezing of the assets of Binance.US and the repatriation of fiat and cryptocurrency held by U.S. customers or for the benefit of U.S. customers. In addition, the motion prohibits the defendants from destroying, altering or concealing records and imposes other sets of conditions on discovery.

Some in the crypto community shared concerns that the restraining order could spark a “bank run” on the exchange.

The emergency motion from the SEC is not expected to directly impact the customers' ability to withdraw, and will still require a district judge's sign-off to go ahead.

*Excerpt from the temporary restraining order by the SEC. Source: CourtListener*

Binance.US said the injunction was “unwarranted,” claiming it was filed as part of a ploy to gain an advantage in litigation after the exchange spent the past week in dialogue with the SEC. Binance.US stated:

“The filing of the preliminary injunction is unwarranted and based more on the SEC Staff obtaining an advantage in litigation versus genuine concern about the safety of customer assets.”

"Despite the information the company has provided to ensure SEC Staff of the safety of customer assets, the Staff has nonetheless decided to file the motion seeking a temporary restraining order and preliminary injunction," Binance.US said, adding:

”While we are disappointed by this action, we look forward to defending ourselves in court.”

Cointelegraph contacted tBinance.US for further comment but did not receive an immediate response.

The order comes the same day Coinbase was sued by the SEC for allegedly offering unregistered securities.

The SEC lawsuit alleges that Coinbase has never registered as a broker, national securities exchange or clearing agency, evading the disclosure scheme for securities markets, and has been operating as an unregistered security broker since 2019. The suit bears similarities to the one brought against Binance on June 5.

Binance.US seeking to cut Changpeng Zhao’s majority stake: Report

May 12, 2023 Coin Telegraph

Binance

Changpeng Zhao is the crypto exchange's founder, majority owner and chair. He is also the CEO and co-founder of the global crypto exchange, Binance.

Crypto exchange Binance US and its founder Changpeng Zhao (CZ) are reportedly looking for ways to reduce his stake in the firm, amid harsh scrutiny from United States federal regulators over the past year.

The crypto executive — Binance US’ majority owner — has reportedly been trying to reduce his stake in the U.S.-based exchange since last summer, according to a report by the Information on May 11 citing people familiar with the matter.

Binance and Changpeng Zhao have seen intense scrutiny from United States federal regulators over the past year.

In March, the Commodity Futures Trading Commission (CFTC) sued Binance and CZ for operating what it alleged was an “illegal” exchange with a “sham” compliance program.

The firm was accused of willfully evading U.S. law, “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.”

In response to the lawsuit, Binance has claimed regulatory compliance, telling Cointelegraph, “We have implemented a robust ‘three lines of defense’ approach to risk and compliance,” at the time.

*CZ responds to the CFTC on March 28. Source: Binance.com*

Since then, Binance US bosses have reportedly been seeking ways to reduce CZ’s stake and influence over the company, worried that they may not be able to acquire certain regulatory licenses as long as CZ remains the majority owner.

Cointelegraph reached out to global exchange Binance who did not comment on the matter related to Binance US and CZ as an individual and majority shareholder of the U.S. exchange. Binance US did not respond by the time of publication.

In February, the SEC sued Paxos, the issuer of Binance’s stablecoin BUSD resulting in the end of minting. Meanwhile, the regulator blocked approval of a Binance.US bid for assets belonging to bankrupt crypto lending firm Voyager Digital.

It appears that the Securities and Exchange Commission (SEC) is specifically targeting American-based crypto exchanges to bring them under the same stringent regulations as banks and stock brokerages.

The result has been an exodus from the U.S. with major players including Coinbase, Gemini, Ripple, and Galaxy Digital among those eyeing a move offshore following recent SEC enforcement action.

Other major exchanges such as Kraken and Bittrex have already fully or partially shuttered services in the United States as the war on crypto continues.

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Voyager Digital Provides Update on Reimbursement Plan for Creditors

May 6, 2023 Bitcoin.com

Binance.us

SEC v Coinbase: Judge Jennifer H. Rearden

SEC v Binance: Judge Amy Berman Jackson

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