Recent US SEC crypto crackdowns led Binance to consider severing US ties
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Last year has been rather bad for the crypto industry, for a variety of reasons. The crypto winter that took hold of the sector led many firms to bankruptcy, including the major crypto exchange FTX. FTX’s collapse further led to the crash of other crypto businesses.
Even before that, the collapse of the Terra blockchain, it’s native cryptocurrency, and its stablecoin, all led to the strengthening of the crypto winter, which may have lasted for longer than it should have, fueled by these events.
In response, the US SEC started a crypto crackdown in 2023, announcing that staking is considered an unregistered security, and it placed companies that offer crypto investment advice under a microscope, while the New York DFS proclaimed the Paxos-issued Binance USD (BUSD) stablecoin an unregistered security.
Will Binance cut its losses and leave the US?
Many have feared that the crypto crackdown will ruin the crypto industry in the US, and indeed, some signs of this can already be seen. The biggest one yet came from recent reports that Binance is considering severing ties with US business partners.
The company is already being investigated by various government agencies and regulators, while the SEC’s crypto crackdown is certainly not helping the matter. The exchange’s CEO, Changpeng Zhao, admitted that he is looking to end relationships with US service firms and banks, while re-evaluating the exchange’s capital investments, according to some sources.
The sources further said that the exchange is even considering delisting cryptos issued by US-based companies and projects, including the USDC stablecoin. While this claim came from an unnamed source, Zhao denied this on Twitter, stating that blockchain has no borders.
4. False. https://t.co/qjqLrx3TGF
— CZ 🔶 Binance (@cz_binance) February 17, 2023
He did confirm some things shared by the sources, however. In his tweet, he said “We pulled back on some potential investments, or bids on bankrupt companies in the U.S. for now. Seek permission first.”
We pulled back on some potential investments, or bids on bankrupt companies in the US for now. Seek permission first. https://t.co/js0OR7gy68
— CZ 🔶 Binance (@cz_binance) February 17, 2023
Binance is bracing itself for a clash with the US regulators
In addition to the New York Department of Financial Services taking action against against BUSD, Binance was also scrutinized for its relationship with the crypto bank Silvergate. Also, the DFS is not the only one who has been investigating the exchange — the SEC, CFTC, JD, and IRS have all started their own investigation of the platform.
Following the SEC’s other moves from earlier this week, Binance became convinced that the regulator will come after its own business sooner or later, bracing itself for fines, especially after Kraken had to disable its staking service in the US and pay a fine totaling in $30 million.
Of course, US customers are serviced by Binance.US, which supposedly operates entirely independently from the main exchange. This platform has no plans to shut down or leave the US, according to reports.
