The Wall Street Journal has reported that the U.S. subsidiary of Binance is experiencing difficulties in finding a suitable bank to handle its customers' cash, following the unexpected collapse of Signature Bank a month ago. Binance.US is currently relying on at least one intermediary to store its customers' assets, resulting in significant delays in transferring and moving funds.
Binance.US Seeks Banking Support
Previously, Binance.US used to send user deposits to either Signature Bank or Silvergate Capital Corp, which were known for their support for cryptocurrency. However, when both institutions failed, the exchange is currently struggling to find a new banking partner. As a result, Binance.US is using at least one intermediary to store its customers' assets, causing a delay in the process of transferring and moving funds.
Over the past few months, Binance.US has made several unsuccessful attempts to establish direct banking relationships with various financial firms, including Cross River Bank, which already has connections with a number of crypto companies, and Customers Bancorp Inc., a regional bank headquartered in Pennsylvania.
According to the Wall Street Journal, a Binance.US spokesperson stated that the exchange works with multiple U.S.-based banking and payment providers, and is continuing to onboard new partners while enhancing its internal systems to establish a more stable fiat platform and provide additional services.
Binances Growing Troubles
Binance, the world's largest crypto exchange, has been facing numerous regulatory and legal challenges in 2023. In March, the US CFTC filed a lawsuit against Binance and its CEO Changpeng Zhao for allegedly violating rules and evading regulations aimed at preventing illicit financial activities.
Moreover, in the wake of the US crackdown on crypto, Dubai has also tightened its scrutiny on companies applying for crypto licenses. Binance exchange has been asked to provide additional information to implement more stringent compliance procedures by the Virtual Assets Regulatory Authority (VARA).
As a result of these developments, Binance's native cryptocurrency BNB has dropped approximately 0.25% in the past hour. Currently, the price of BNB is $311.63, and it has a market cap of around $50 billion.
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