Binance, the world's largest cryptocurrency exchange by daily trading volume, has announced the launch of its new subscription-based Bitcoin cloud mining services. The move comes as a surprise amidst the ongoing regulatory challenges Binance is facing in the United States.
Binance's Bitcoin Cloud Mining Service
Binance announced the launch on Twitter, claiming that users who are interested in Bitcoin mining but lack the necessary hardware can subscribe to these new cloud mining services and purchase hashrates. Currently, Binance offers 1 Terahash per second (Th/s) at a rate of $10.7280. An increase in the purchased hashrate corresponds to an increased probability of higher Bitcoin earnings through mining.
The BTC mining subscription service will remain active for six months. During this 180-day period, for every TH/s purchased, users could potentially earn 0.0004338 BTC. However, as of now, this product is only available on Binance's global website, indicating that users from the United States cannot access it.
Current Regulatory Trouble
Binance's decision to launch these cloud mining services comes at a particularly challenging time for the cryptocurrency exchange. In the United States, the Securities and Exchange Commission (SEC) has taken legal action against Binance, alleging violations of securities laws. Alongside this, the SEC has filed for a temporary restraining order to freeze the assets of Binance.US.
The SEC has accused Binance of operating as an unregistered securities exchange, and CZ has been accused of failing to prevent U.S. customers from using the platform and providing misleading information about its market surveillance measures. According to the lawsuit, Binance and CZ were involved in an "elaborate scheme" to evade U.S. federal securities laws, which included creating separate U.S. entities and diverting billions of dollars in customer funds to Merit Peak Limited, a separate company under Zhao's control.
In a press release, SEC Chair Gary Gensler stated that the charges against CZ and Binance detail an "extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law." He further accused the defendants of misrepresenting their risk controls, manipulating trading volumes, and actively concealing crucial information, such as the platform's operations, manipulative trading by its affiliated market maker, and the custody of investor funds and crypto assets.
Binance Building Forward
In the wake of these accusations, CZ has remained unfazed, choosing to dismiss the charges with a tweet stating "4", a reference used within the Binance community to encourage users to ignore fear, uncertainty, and doubt (FUD). He assured the community that Binance's systems remain stable and that deposits and withdrawals are operating as normal.
In preparation for the legal proceedings, Binance.US has already added former SEC enforcement co-director George Canellos to its legal team. Meanwhile, last week, Binance.US revealed that it has suspended USD deposits on its platform, a significant step in its transition to becoming an exclusively crypto-based exchange.
Binance is not the only crypto exchange facing regulatory pressures. Coinbase, another prominent cryptocurrency exchange, also found itself on the receiving end of a lawsuit from the SEC for alleged failure to register as a broker, national securities exchange, or clearing agency.
Binance's cloud mining services launch amid such regulatory challenges is a notable step, reflecting the exchange's commitment to advancing its services, even as it grapples with legal and regulatory issues.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
