Per a Wall Street Journal report, the recent banking chaos and increased regulatory scrutiny on the crypto industry are making it challenging for Binance.US, a cryptocurrency exchange, to partner with a bank to deposit its customers’ money.
According to the report, Binance.US, which has a licensing agreement with Binance.com and operates as a separate legal entity, used to send its customers’ cash to either Signature Bank or Silvergate Capital. However, the failure of these crypto-friendly banks is leading crypto firms to look for new banking partners.
Binance.US tried to partner with Customers Bancorp (NYSE:CUBI) and Cross River Bank but failed.
Earlier, the Commodity Futures Trading Commission (CFTC) sued Changpeng Zhao and three entities that operate the Binance platform for violating several Commodity Exchange Act (CEA) and CFTC regulations. The CFTC also sued Binance’s former chief compliance officer, Samuel Lim, for helping the violations.
While the regulatory crackdown on crypto firms is increasing, Bitcoin (BTC-USD) and Ethereum (ETH-USD), the two major cryptocurrencies, have marked a solid recovery in 2023. Bitcoin prices have gained over 70% year-to-date, while Ethereum has increased by about 30%.
Binance’s digital currency, Binance Coin (BNB-USD), is up more than 28% so far in 2023.
