Binance.US, the cryptocurrency exchange, has introduced changes to its terms of service, indicating that direct withdrawals in U.S. dollars are no longer facilitated on the platform. The amendment, implemented on October 16, specifically pertains to the “BAM Fiat Wallet,” which relates to Binance.US’s U.S. dollar custody services.
According to the updated terms, Binance.US users now have the option to “convert” their U.S. dollar holdings into stablecoins or other digital assets in order to withdraw funds from their accounts.
Users took to social media, such as X (formerly Twitter), to verify the altered terms of service on Binance.US. One crypto observer humorously noted, “Binance seizes USD. Don’t worry, you can buy Tethers printed out of thin air or other cryptocurrencies.”
In alignment with prior terms of service revisions, Binance.US reiterates that digital assets do not qualify for insurance protection by the Federal Deposit Insurance Corporation (FDIC). The exchange clarifies that, should they terminate their relationship with a USD custodian and fail to secure another, users will be provided notice and a withdrawal period for their U.S. dollar deposits. Any funds not withdrawn within the stipulated time frame will be converted into stablecoin digital assets and transferred to the user’s digital assets account.
These updated terms deviate notably from those posted in May 2023. At that time, Binance.US indicated that BAM, the operator of Binance.US, worked with USD custodians to ensure U.S. dollar deposits were held by custodians in omnibus accounts at FDIC-insured banks. BAM aspired for these funds to be eligible for FDIC insurance coverage limits of $250,000 per eligible individual, with such protection applying only in the event of a bank failure. The terms also specified that FDIC insurance wouldn’t cover failures by BAM or any of its employees.
Binance.US has not responded to Cointelegraph’s request for comment. This development reflects ongoing challenges faced by Binance.US regarding its fiat on-ramps and off-ramps, with the exchange having previously suspended some U.S. dollar operations in the past year.