Following recent rule changes at Binance.US, customers can no longer withdraw U.S. dollars and have also lost Federal Deposit Insurance Corporation FDIC protection.
Customers wanting to take out money need to convert it to a stablecoin or other cryptocurrency first. Previously, the company had already stopped taking dollar deposits.
The FDIC agency used to safeguard customer funds up to $250,000. Not anymore.
This change followed an FDIC announcement. The FDIC said its insurance doesn’t cover cryptocurrency deposits.
In addition, the FDIC warns that if the exchange faces problems, the U.S. government won’t step in to help.
This FDIC decision affects all crypto exchanges in the U.S., not just Binance.US.
Meanwhile, Binance.US is also fighting legal cases in the U.S. Authorities accuse it of offering illegal financial products.
This has led to many investors leaving the platform. The situation got worse when the company’s former CEO stepped down.
Background
Binance.US is a separate entity from its parent company, Binance, which is one of the world’s largest crypto exchanges.
The parent company has faced scrutiny from regulators globally. In the past, Binance.US aimed to attract U.S. customers by adhering to local laws.
This included applying for FDIC insurance to protect client funds.
However, the crypto landscape in the U.S. is evolving. Regulatory agencies are becoming more strict.
They aim to protect investors and prevent financial crimes. The FDIC’s recent decision to not insure crypto assets is part of this trend.