Binance.US, a cryptocurrency exchange, has modified its terms of service to imply that United States dollar direct withdrawals are no longer permitted on the platform. Binance US has “updated the deposit insurance language” in the company’s terms of service, according to an email that was distributed to users. It stated that it had taken this action in accordance with FDIC directives. The firm initially declared in a now-deleted blog post that Binance US accounts would be insured for a maximum of $250,000 in 2019.
All USD deposits are held in pooled custodial accounts at multiple banks that are insured by the FDIC. The pooled custodial accounts are maintained in a manner that provides access to pass-through FDIC insurance coverage up to the depositor coverage limit, which is currently $250,000.
The post read at that time
Digital Assets are not legal tender, are not backed by any government, and accounts and value balances are not subject to protections or insurance provided by the FDIC or the Securities Investor Protection Corporation.
States the updated terms of service
The firm halted dollar deposits in early June, citing banking partners’ reluctance to engage with the sector as a result of the U.S. Securities and Exchange Commission’s (SEC) “extremely aggressive and intimidating tactics” toward the cryptocurrency industry.
June 5 saw the filing of a lawsuit by the SEC against Binance.US, the international division of Binance, and its founder Changpeng “CZ” Zhao, on charges that they operated unregistered securities platforms. The company’s compliance with legal requests and its handling of custody practices have been called into question by the SEC.
