Bearish momentum builds up as Binance.US issues a new directive amid the ongoing crackdowns.
After the U.S. Securities and Exchange Commission (SEC) kicked out the lawsuit earlier this week, the crypto giant vehemently denies the baseless allegations and pledges to vigorously defend itself, its customers, partners, and the entire industry.
However, the ongoing situation only brings more challenges.
In a recent announcement, the American arm of the leading crypto exchange disclosed the halting of USD deposits and potentially its partnership with banks. The move will come into effect on June 13, 2023, according to Binance’s notice.
USD Deposits No More
As part of the new decision, the platform’s ability to receive and withdraw fiat US dollars is significantly impacted. Additionally, Binance.US outlined several changes to be implemented during the transition period.
Customers are encouraged to withdraw their USD via bank transfer (ACH) by June 13, 2023. However, due to high transaction volumes and potential bank closures over weekends, processing times for ACH withdrawals may be longer than usual.
USD deposits will be temporarily suspended, and the platform will initiate periodic buy orders starting immediately to convert funds into cryptocurrencies, the announcement highlighted.
Alternatively, starting next week, Binance.US will gradually phase out USD trading pairs, such as BTC-USD, while continuing to support stablecoin pairs, like BTC-USDT. Any remaining USD balance on the platform after June 15, 2023, will be converted into withdrawable stablecoins on the blockchain.
Despite these challenges, Binance.US assured its users that cryptocurrency services would operate normally, including trading, deposits, withdrawals, and staking participation.
Client funds remain safe and secure, as the company maintains a full 1:1 custody of all client assets. Binance acknowledged the need to find more stable banking partners and stated that it would continue to provide updates on its status page.
USD pairs are among the key products of Binance in the U.S. market. The suspension of USD deposits marks a tough milestone in the exchange’s roadmap, setting the negative stage for transactional volume and the exchange’s profit.
Binance Coin Drops By 15% Within 7 Days
No doubt that Binance Coin (BNB) has been hit hard following the recent events. According to CoinMarketCap, $BNB dropped by 15% over the last 7 days. The cryptocurrency is currency trading at around $260.
Another top coin that is also under major impact is Cardano ($ADA). $ADA dropped by approximately 13% within a week.
On the other hand, Bitcoin is heading toward $27,000. The flagship cryptocurrency plunged by 5% shortly after the SEC lawsuit surfaced but recovered beyond $26,000 not long after that.
Bitcoin has demonstrated remarkable performance since the beginning of the year, with a 60% price surge. Although the crypto market has undergone major setbacks due to unfavorable macroeconomic conditions, the world’s largest cryptocurrency has rebounded significantly following a challenging year in 2022.
Despite Bitcoin’s impressive recovery, its price has been unable to regain full strength due to concerns surrounding the potential impact of tightening monetary policies.
Recently, officials from the U.S. Federal Reserve (Fed) indicated a hawkish pause of interest rates during the June policy meeting, signaling a decision to maintain current interest rates for the time being while leaving the door open for future increases.
This cautious approach may dampen Bitcoin’s recovery as market participants remain wary.
While the Fed’s decision to hold off on rate hikes at the current meeting offers temporary relief, the possibility of further actions remains if inflation data in the U.S. continues to indicate persistent price pressures.
Market observers are closely monitoring these developments, which could have significant implications for the future trajectory of Bitcoin and the broader cryptocurrency market. While there is massive pressure on cryptos, prices have not moved yet.
We will see if the government can impact the crypto markets in the coming weeks.
Source: https://blockonomi.com/binance-us-to-suspend-usd-deposits-and-fiat-withdrawal-channels/