Changpeng Zhao, the Chief Executive Officer of the world’s largest cryptocurrency exchange, Binance, recently announced via Twitter that the company had pulled back on potential investments or bids on bankrupt companies in the United States. This announcement came shortly after Bloomberg reported that Binance was considering ending its relationship with its U.S. partners and delisting tokens from any U.S.-based projects.
In response to this report, a Binance spokesperson wrote to MarketWatch that “like every other blockchain company, we are conducting a careful cost-benefit analysis and will pivot our business as necessary to protect our global user base.” This statement implies that Binance is taking a more cautious approach to the United States market due to the increased scrutiny it has been receiving from regulators.
Stablecoin issuer Paxos recently announced that it would stop minting new BUSD, a dollar-pegged cryptocurrency managed by Paxos and branded by Binance, following an order by the New York State Department of Financial Services requiring that minting cease. This was only compounded by the fact that Paxos also recently received a Wells notice from the U.S. Securities and Exchange Commission that warned the stablecoin issuer it could face an enforcement action.
In response to this increased scrutiny, Binance has temporarily suspended deposits and withdrawals of U.S. dollars via bank accounts since February 8th. This suspension of services for the U.S. market appears to be part of Binance’s strategy to target non-U.S. customers. In contrast, Binance.US., a smaller exchange claimed to be independent, wrote to MarketWatch that it doesn’t have any plans to leave the U.S..
The increased scrutiny of the cryptocurrency industry by U.S. regulators has caused many companies to take a more cautious approach when it comes to operating in the U.S. market. Binance’s decision to pull back on potential investments or bids on bankrupt companies in the United States is just one example of this cautious approach. Binance’s decision to temporarily suspend deposits and withdrawals of U.S. dollars via bank accounts is another example of this cautious approach.
However, Binance.US., a smaller exchange claimed to be independent, has stated that it does not have any plans to leave the U.S. market. This suggests that there may still be some opportunity for cryptocurrency companies to operate in the United States, provided that they are willing to take the necessary precautions to comply with U.S. regulations.
Overall, it is clear that U.S. regulators are taking a more active role in the cryptocurrency industry. This increased scrutiny has caused many companies to take a more cautious approach to operating in the U.S. market. Binance’s decision to pull back on potential investments or bids on bankrupt companies in the United States is just one example of this cautious approach. Although Binance.US., a smaller exchange claimed to be independent, has stated that it does not have any plans to leave the U.S. market, it is still important for cryptocurrency companies operating in the United States to take the necessary precautions to comply with U.S. regulations.
