Cryptocurrency exchange Binance.US recently made changes to its terms of service, indicating that direct withdrawals in the U.S. dollar are no longer supported on the platform. The update, which was made on October 16, focuses on the section about the “BAM Fiat Wallet,” referring to Binance US services related to USD custody. According to the updated terms, users are now required to convert their USD funds into stablecoins or other digital assets in order to withdraw their funds from their accounts.
The news of the changes in Binance.US’ terms sparked discussions among cryptocurrency enthusiasts on social media. One observer on X (formerly Twitter) expressed concerns, stating, “Binance seizes USD. Don’t worry you can buy Tethers printed out of thin air or shitcoins.”
It’s important to note that Binance.US emphasized, similar to previous updates, that digital assets are not eligible for insurance protections by the Federal Deposit Insurance Corporation (FDIC). In an update on May 5, 2023, Binance.US mentioned that they would provide notice and time for users to withdraw their U.S. dollar deposits if they terminate their relationship with a USD custodian and can’t find another one. However, any deposits not withdrawn by the provided deadline would be converted to stablecoin digital assets and transferred to users’ digital assets account.
Comparing the latest updates to Binance.US’ terms with a version from May 2023, it’s evident that there have been significant changes. The previous version included information that Binance.US operator, BAM, is not a member of FDIC and is not a bank. However, it mentioned that BAM had worked with USD custodians to ensure that U.S. dollar deposits are held by them in omnibus accounts at FDIC-insured banks. In the May 2023 terms of use, BAM expressed its intention to make the funds eligible for FDIC insurance coverage, but only in the event of a bank failure.
Despite the changes in Binance.US’ terms, the exchange has been facing difficulties in maintaining its fiat on-ramps and off-ramps. In June 2023, Binance.US suspended USD deposits and warned customers of an incoming pause in fiat withdrawal channels. While the firm later resolved the withdrawal issues, it cautioned that the solution might be temporary.
At the time of writing, Binance.US had not responded to Cointelegraph’s request for comment on the matter.
The updated terms of service from Binance.US once again highlight the challenges faced by the exchange in its USD operations. As the cryptocurrency industry continues to evolve, regulatory and compliance requirements can impact the ability of exchanges to offer seamless services.
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