Binance's US arm struggles to find a banking partner: report
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The recent banking crisis has left the U.S. arm of cryptocurrency exchange Binance struggling to find a bank to handle its customers' cash.
Binance.US previously used Signature Bank or Silvergate Capital Corp for deposits, according to The Wall Street Journal.
Both financial institutions failed last month, sending the exchange looking for a banking partner.
For now, Binance.US is using at least one middleman to store funds on its behalf, which can slow down the process of sending and moving funds.
BINANCE SEES $2 BILLION IN OUTFLOWS AS TROUBLES COMPOUND
Binance logo displayed on a phone screen and representation of cryptocurrencies. ((Photo by Jakub Porzycki/NurPhoto via Getty Images) / Getty Images)
The company hasn't been able to establish relationships with Cross River Bank and Customers Bancorp Inc, according to the report.
The banks are reportedly reluctant due to concerns over regulatory concerns.
"We work with multiple U.S.-based banking and payment providers and continue to onboard new partners while upgrading our internal systems to create a more stable fiat platform and offer additional services," a spokesperson for Binance.US told the WSJ.
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Last month, the Commodity Futures Trading Commission sued Binance, alleging the exchange operated illegally in the U.S. and violated rules designed to prevent illicit financial activity.
Since the lawsuit, investors have pulled $1.6 billion from Binance.
The CFTC sued Binance and executives, including founder and CEO Changpeng "CZ" Zhao, accusing the defendants of willfully skirting U.S. law.
BINANCE AND ITS FOUNDER SUED BY CFTC
Changpeng Zhao, founder and chief executive officer of Binance, attends the Viva Technology conference in Paris, France, June 16, 2022. (Benoit Tessier/File Photo / Reuters Photos)
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In a civil complaint, the CFTC alleges Binance and Zhao violated numerous federal regulations – including operating an illegal digital assets derivatives exchange – and charges the exchange's former chief compliance officer, Samual Lim, with aiding and abetting in the alleged violations.
The crypto giant and the industry at large have fallen under greater scrutiny from regulators following the collapse of Binance's one-time chief rival, FTX, in November.