Binance.US scrambles to find banking partners

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Binance’s US partner is reportedly struggling to find a bank for its customers.

The problem began following the collapse of Signature Bank and Silvergate Capital, two banks that dealt with the cryptocurrency industry, The Wall Street Journal reported on Sunday (April 9), citing people familiar with the matter. .

This is the latest in a series of setbacks for Binance, the world’s largest cryptocurrency company, and its US-based subsidiary, Binance.US.

According to the WSJ, Binance.US previously sent dollar deposits to Signature or Silvergate. Then last month, Silvergate voluntarily liquidated, while Signature was taken over by regulators in one of the biggest bank failures in US history. The shutdown of lenders has left crypto companies looking for new banking partners.

In the meantime, Binance.US uses at least one middleman to hold the money on its behalf, the sources said. And because the intermediary keeps the funds at their bank, they can slow down the money transfer process.

PYMNTS has reached out to Binance.US for comment but has yet to hear a response.

Sources tell the WSJ that Binance.US has unsuccessfully attempted to open direct banking relationships with banks such as Cross River Bank, the New Jersey-based lender that works with some crypto companies and FinTech companies, as well as Pennsylvanias. Customers Bancorp.

The partnerships never materialized, the sources said, because the banks were concerned about regulatory risks.

Last month saw the news that former Binance.US. CEO Catherine Coley had hired a lawyer. A Reuters report said Coley, who started the US arm of Binance before leaving the company two years later, did so as the government launched an investigation into Binance.

This happened when the US Commodity Futures Trading Commission (CFTC) charged Binance CEO Changpeng Zhao, Binance Holdings Limited, Binance Holdings (IE) Limited and Binance (Services) Holdings Limited in federal court with violating the Commodities Exchange Act and CFTC regulations.

The CFTC also accused Samuel Lim, who served as Chief Compliance Officer of Binances from 2018 to 2022, of aiding and abetting these violations. Coley is not named in the CFTC lawsuit, according to the Reuters report.

In a statement to PYMNTS, a spokesperson for Binance said the company had been working alongside the CFTC for two years and found the filing unexpected and disappointing after growing its compliance team from 100 to 750 over the course of the year. of the last two years.

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