The global cryptocurrency exchange Binance.US branch has had trouble finding a new bank partner. According to a Wall Street Journal article from April 8, Binance’s U.S. branch has experienced difficulties finding a new bank partner to act as a fiat on-ramp and off-ramp for its clients nationwide.
According to the WSJ, which cited “people familiar with the subject,” Binance.US was left without banking facilities due to the recent collapses of Silvergate and Signature Bank and was forced to rely on middlemen’s banks to keep its cash.
Another aspect making things difficult for the exchange is the regulatory crackdown on banks that have cryptocurrency clients. For suspected trading breaches, the U.S. Commodities Futures Trading Commission (CFTC) filed a lawsuit against Binance Holdings and its CEO, Changpeng “C.Z.” Zhao, in March. The CFTC has been looking into the cryptocurrency exchange since 2021.
Although recent attempts to create direct banking partnerships with banks, such as Cross River Bank and Consumers Bancorp, have failed, Binance.US requires a bank to store its customers’ U.S. cash directly.
With the financial technology company Prime Trust, Binance.US is now keeping client assets. According to a Prime Trust representative, all customer monies are kept by the company’s banking partners.
A spokeswoman for Binance.US told the WSJ that the company “works with several U.S.-based banking and payment institutions and continues to onboard new partners while updating our internal infrastructure to build a more robust fiat platform and offer additional services.”
In the United Kingdom, where banks are becoming less willing to accept customers from the crypto industry, Binance.US is operating in a similar climate. The few U.K. banks still collaborating with cryptocurrency businesses are asking for additional proof and details regarding their monitoring procedures.