Binance.US Dollar Withdrawals Discontinued Because It Is No Longer FDIC Insured

Key Points:

• Binance.US ends FDIC insurance for crypto holdings.
• Binance.US dollar withdrawals are no longer available and are limited to stablecoins or cryptocurrencies.
• Regulatory pressure prompts the change of exchange.

According to Decrypt, Binance.US dollar withdrawals will no longer be available to US users because their crypto holdings are no longer FDIC-insured.

Binance.US Dollar Withdrawals Not Available for US Users

This update was conveyed through an email sent to users, citing changes in the platform’s terms of service based on guidance from the FDIC.

In a now-deleted 2019 blog post, Binance.US initially assured users that their accounts were insured up to $250,000. The post stated that “All USD deposits are held in pooled custodial accounts at multiple banks that are insured by the FDIC,” with an assurance of pass-through FDIC insurance coverage. However, these guarantees have been rescinded with the recent changes.

As per the updated terms of service, users are no longer eligible for FDIC insurance protections or the option to use Binance.US dollar withdrawals have been disabled. To access their funds, users must first convert their dollars into stablecoins or other cryptocurrencies.

Regulatory Pressure Alters Withdrawal Options on Binance.US

This development comes after the U.S. Securities and Exchange Commission (SEC) took emergency action to freeze Binance’s U.S. assets, leading Binance.US to encourage customers to withdraw their U.S. dollars from the platform or convert them to cryptocurrencies. The exchange also alerted users that its banking partners were planning to suspend dollar withdrawals as early as June 13.

The move to discontinue FDIC insurance for crypto holdings on Binance.US underscores the evolving regulatory landscape surrounding cryptocurrency exchanges and the need for users to stay informed about the security and insurance provisions of their chosen platforms.

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