Binance.US is trying to find banking partners
The American partner of Binance is reportedly struggling to find a bank for its customers.
The trouble began after the downfall of Signature Bank and Silvergate Capital, two banks that approached the cryptocurrency industry, The Wall Street Journal reported on Sunday (April 9), citing sources familiar with the matter.
It’s the latest in a string of setbacks for Binance, the world’s largest cryptocurrency company, and its US-based affiliate, Binance.US.
According to the WSJ, Binance.US had previously sent dollar deposits to Signature or Silvergate. Last month, Silvergate voluntarily liquidated itself, while Signature was taken over by regulators in one of the biggest bank failures in US history. The closure of lenders has left crypto companies scrambling for new banking partners.
Meanwhile, Binance.US uses at least one intermediary to hold funds on their behalf, the sources said. And because the middleman keeps the funds in his bank, it can slow down the process of moving money.
PYMNTS has reached out to Binance.US for comment, but has yet to hear back.
Sources tell WSJ Binance.US has unsuccessfully offered to open direct banking relationships with banks that include Cross River Bank, the New Jersey-based lender that works with some crypto and FinTech firms, as well as Pennsylvania’s 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 had launched the US arm of Binance before leaving the company two years later – did so as the government launched an investigation into Binance.
It came as 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 Commodity Exchange Act and CFTC regulations.
The CFTC also charged Samuel Lim, who served as Binance’s Chief Compliance Officer from 2018 to 2022, for complicity in these breaches. Coley is not named in the CFTC case, the Reuters report said.
In a statement to PYMNTS, a Binance spokesperson said the company has been working with the CFTC for two years and finds the filing “unexpected and disappointing” after growing its compliance team from 100 to 750 over the past two years.
