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Binance.US Axes FDIC Insurance and Dollar Withdrawals Following Regulatory Consultation

Press Releases Crypto News BeInCrypto Binance.US Axes FDIC Insurance and Dollar Withdrawals Following Regulatory Consultation

Binance.US has rescinded its offering of Federal Deposit Insurance following a consultation with the Federal Deposit Insurance Corporation (FDIC). The exchange confirmed an update to the “deposit language insurance” in an email to clients.

The new terms of services now confirm that customer deposits are not eligible for FDIC insurance, having previously qualified for a maximum of $250,000. The revised services also mandate that US dollar (USD) withdrawals must first be converted to stablecoins or other cryptocurrencies.

Accept or Leave: Binance.US to Customers

According to the letter, the new terms will go into effect today, and continuing to trade on Binance.US will constitute an acceptance of those terms. Those who don’t agree with the changes can close their accounts, provided they are in good standing.

The previous terms and conditions, published on Oct. 18, 2019, stated that:

“USD deposits are eligible for FDIC insurance coverage. All USD deposits are held in pooled custodial accounts at multiple banks that are insured by the FDIC.

“The pooled custodial wallets are maintained in a manner that provides access to pass-through FDIC insurance coverage up to the depositor coverage limit, which is currently $250,000.”

The exchange confirmed it is also halting direct USD withdrawals after suspending deposits in June.

Community reactions to the rescission of USD withdrawals and the need to convert dollars to other assets before withdrawal were mixed. Some, like SpillnCryptoTea, view the removal of the dollar withdrawals as a way to reduce dependence on the dollar.

Others have argued that it pushes people toward

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Author: David Thomas

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