Binance.US, the United States arm of cryptocurrency exchange Binance, is facing a major obstacle as it struggles to find a bank to handle its customers’ cash.
According to a report by the Wall Street Journal, the company is facing banking partner issues following the failure of Signature Bank and Silvergate Capital Corp, both of which were previously seen as crypto-friendly banks.
Binance under scrutiny
Binance.US is now reportedly rushing to find a new banking partner as it currently uses at least one intermediary to store funds. Since the money is being held by a third party, it can slow down sending and moving funds, the report said.
Binance.US has tried unsuccessfully to establish relationships with Cross River Bank and Customers Bancorp Inc, but banks are reluctant due to concerns over regulatory risk, according to the report.
The inability to find a reliable banking partner is a major setback for Binance.US, as it can impact the flow of funds for its customers.
The exchange has stated that it works with multiple U.S.-based banking and payment providers and continues to onboard new partners while upgrading its internal systems to create a more stable fiat platform and offer additional services.
The news comes at a time when Binance is already under scrutiny in the United States. Last month, the U.S. Commodity Futures Trading Commission (CFTC) sued the exchange along with its CEO and former top compliance executive, alleging that they were operating an “illegal” exchange and a “sham” compliance program. Since the lawsuit, investors have withdrawn $1.6 billion from the platform.
Binance is the world’s largest cryptocurrency exchange by volume, but it has faced regulatory challenges in several countries, including the United States and the United Kingdom.
The company has been accused of facilitating money laundering and fraud by allowing users to trade cryptocurrencies without proper identification.
Binance turns down offer to acquire Huobi stake
In other news, Binance has turned down an offer to acquire Tron blockchain founder Justin Sun’s ownership stake in rival exchange Huobi. Binance wasn’t interested because of rumors that Huobi has ties to mainland China, which the company wants nothing to do with, according to a person familiar with the matter.
The scope of Sun’s involvement with Huobi has been cloaked in secrecy. A company called About Capital purchased Huobi in October of last year.
Sun’s representatives have said he’s not involved with About, though Huobi confirmed in January that he’s a leader of the company. Last week, following a Bloomberg report that Sun was trying to sell his Huobi stake, he compared such speculation to an April Fool’s joke.
Binance continues to face challenges in the United States and other countries as regulators scrutinize its operations. Finding a reliable banking partner is crucial for the company’s success in the U.S., and the lack of one could further hinder its growth in the region.
The cryptocurrency industry as a whole is also facing regulatory challenges as governments around the world attempt to control the sector.
