Behind the Move — Binance US & Users Losing Access to Binance.com

Wilfred Michael 

Wilfred Michael

News reporter

14 June 2019,
10:18
Behind the Move — Binance US & Users Losing Access to Binance.com

Leading cryptocurrency exchange, Binance, announced today, the upcoming launch of its new subsidiary, Binance US.

The new offshoot, which is possible as a result of Binance's partnership with FinCEN registered partners BAM Trading Inc will serve as the exchange's regulatory compliant platform for U.S customers.

Speaking in the announcement, Binance CEO, Changpeng Zhao revealed that Binance US would still offer the same speed and liquidity as Binance.com. A primary difference would be that BAM Trading Inc. will operate the exchange and ensure that any products and offerings listed on it, complied with U.S laws.

Although Binance failed to announce when the new place would go live or begin accepting deposits, the platform already has an official Twitter handle and a website with the 'coming soon' message.

Binance.com to Stop Accepting U.S Customers on September 12

Following the upcoming opening of Binance US, Binance also adjusted its terms of service page to reveal that its major platform, Binance.com would no longer allow access to U.S customers.

Specifically, the announcement mentions that following the expiration of 90 days on September 12, affected customers will "continue to have access to their wallets and funds, but will no longer be able to trade or deposit on Binance.com."

It is apparent, though, that Binance would launch the U.S subsidiary in the coming weeks or at least before the deadline for cutting off U.S customers.

Why is Binance Blocking U.S customers?

Binance choosing not just to geo-block U.S users as they did for their DEX platform, but stop offering its services appear to be more of a regulatory compliant move than it is not.

With the U.S Securities and Exchanges Commission (SEC) saying time and again that most ICOs are non-compliant with local laws, Binance currently bears the risk of being charged with selling securities unless it delists several tokens from its platform (for only U.S users) just like Poloniex did last month.

Also, the exchange's already booming Initial Exchange Offering (IEO) platform dubbed Binance Launchpad, although not selling the primary tokens to U.S customers allows purchases after the tokens enter the secondary market.

To be clear, the class of the market that sells these tokens does not matter to the U.S SEC with even tokens issued since 2017, such as Kik's still under their radar.

It is for these obvious reasons that Binance likely decided to launch a U.S subsidiary, instead of making a change that would adversely affect its globally recognized platform.

Meanwhile, we reported earlier this week that the FATF plans to release further rules for crypto trading platforms, suggesting we could see more radical compliant moves from exchanges soon.

 

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