Binance, the global cryptocurrency exchange, is facing challenges in establishing a new bank partner to serve as a fiat on-ramp and off-ramp for its clients in the United States. The failure of Silvergate and Signature Bank to provide banking services left Binance.US without a direct bank, relying on middleman banks to store funds on its behalf. Recent attempts to establish direct banking relationships with banks, such as Cross River Bank and Customers Bancorp, have failed. The regulatory crackdown on banks with crypto clients is also contributing to Binance.US’s struggles.
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Binance.US Customers Affected by the Lack of a Direct Bank
Binance.US customers have been impacted by the lack of a direct bank. The exchange stated in a recent status update that it was “transitioning to new banking and payment service providers over the next several weeks,” and some USD deposit services would be temporarily affected during the transition. Currently, Binance.US is holding customer funds via financial technology firm Prime Trust. A spokesperson for Prime Trust stated that all funds received from clients are stored through its banking partners.
Binance.US’s struggles in finding a bank partner to directly hold its clients’ US dollars are similar to those of UK crypto firms. Banks in the UK are moving away from accepting clients from the crypto sector, with the few remaining banks working with crypto firms requesting more documentation and information about how they monitor clients’ transactions.
