Binance.US requires users to convert dollars to stablecoins to withdraw
Cryptocurrency exchange Binance.US has updated its terms of service, hinting that direct withdrawals in United States dollars will no longer be supported on the platform.
Binance.US updated its terms of service on October 16, updating the section about “BAM Fiat Wallet” to mention Binance.US services related to US dollar protection.
In the updated contract, Binance.US writes that users can convert their US dollar holdings into stablecoins or other digital assets to withdraw funds from their accounts.
Some cryptocurrency enthusiasts have taken to X (formerly Twitter) to confirm the service change on Binance.US. “Binance took USD. Don't worry you can buy Tethers printed out of thin air or shit coin,” wrote one crypto observer on X.
Binance takes US dollars.
Don't worry, you can buy Tethers out of thin air or minted from shitty coins. pic.twitter.com/BPh7SY3qTM
— Bitfinex'ed Kassandra (@Bitfinexed) October 17, 2023
Similar to previous service updates, Binance.US emphasized that digital assets are not eligible for insurance protection by the Federal Deposit Insurance Corporation (FDIC).
“If we terminate our relationship with a US dollar custodian and cannot find another US dollar custodian, we will provide notice and time to withdraw US dollar deposits,” Binance.US wrote in an update on May 5, 2023. The firm added:
“Any USD deposits not canceled by the time frame specified in the announcement will be converted into stable coin digital assets and transferred to your digital assets account.”
Binance.US's terms of service differ notably from a version posted in May 2023. At that time, the page included information that BAM — Binance.US' operator — was and is not a member of the FDIC, now removed. The bank, however, “worked with USD custodians” to ensure that US dollar deposits were held by custodians in omnibus accounts at FDIC-insured banks.
Subject to BAM's and US Dollar Custodian's compliance, it is BAM's intent to “apply only in the event of a bank failure” so that the funds will qualify for the FDIC insurance coverage limit of $250,000, adding the terms of use effective May 2023 read:
“In this case, if the bank fails […]Your account(s) may be with Bank and Fiat. […] It is aggregated for purposes of determining your eligibility for FDIC deposit insurance. FDIC insurance does not protect against BAM's failure or malpractice by any BAM employee.
Binance.US did not immediately respond to Cointelegraph's request for comment.
Related: Binance.US Uses MoonPay as Banking Option to Recover USD Advances
The news is another example of Binance.US fiat on-ramps and struggling to keep it on-ramps since it suspended some US dollar operations last year.
In June 2023, Binance.US suspended US dollar deposits and notified customers of an upcoming hiatus for fiat withdrawal channels. The company went on to say that it has resolved issues with US dollar withdrawals, but cautioned that it may be a temporary solution.
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