Binance Holdings Ltd., the world’s leading crypto exchange, is considering ending relationships with its US business partners amidst mounting regulatory pressure, as reported by Bloomberg.
A reliable insider reports that the company is considering taking action in response to challenges it has faced with a major banking partner and issuer of stablecoins. These challenges have arisen due to increased regulatory scrutiny from various authorities, including the SEC, CFTC, Justice Department, and Internal Revenue Service, all of which have launched investigations into the exchange.
Binance Reassessing Venture-Capital Investments in the US
The exchange is said to be reviewing its venture capital investments in the US and contemplating a potential disassociation from intermediary companies like banks and service firms, as per the source.
The source also noted that the exchange is weighing the option of removing tokens from any US-linked projects, which may include USD Coin, Circle’s stablecoin.
Binance Holdings is not permitted to cater to cryptocurrency clients in the US. Alternatively, Binance.US, a considerably smaller exchange, professes to be self-governing and has stated that it does not have any intentions to exit the US market, according to Bloomberg’s report.
The exchange’s CEO Changpeng Zhao took to Twitter to refute rumors that the company would delist all US-based tokens. He said that the exchange had “pulled back on some potential investments or bids on bankrupt companies in the US for now.”
Binance Secretly Accessed Bank Account Belonging To US Partner
As if the regulatory pressure wasn’t enough, the leading exchange is also facing allegations of secretly accessing a bank account belonging to its US partner, BAM Trading, as per a recent report.
According to banking records and company messages, the exchange transferred over $400 million from the Binance.US account at Silvergate Bank to its trading firm, Merit Peak Ltd, managed by CEO Changpeng Zhao.
It remains unclear why the transfers were made or whether any of the money belonged to Binance.US customers. At the time, the exchange’s public terms of use stated that its customers’ dollar deposits were held at Silvergate and a custodian firm called Prime Trust LLC.
According to bank records, the latter made $650 million in wire transfer deposits into the Binance.US account during the quarter. In response to the allegations, a Binance.US spokesperson, Kimberly Soward, did not address the specific questions about the transfers detailed in the bank records.
She called the reporting “outdated information” and claimed that Merit Peak was “neither trading nor providing any kind of services on the Binance.US platform.” Soward did not say when Merit Peak’s activities ceased.
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