Bankers are beginning to separate themselves from the potential repercussions after being alarmed by the Silvergate and Signature scandals.
Firms inside and outside of the cryptocurrency industry are beginning to diverge since Monday’s news of litigation against Coinbase and Binance.
The civil case brought against Binance, which the SEC asserts is the true beneficiary of Binance.US – has not yet started. Companies that are exposed to the issue, though, have begun taking precautions to secure their balance sheets.
Communication Gap
Binance executives expressed disappointment that the SEC chose litigation over a friendly engagement. The executives at Coinbase and Kraken echoed similar sentiments by accusing the agency of refusing to engage in productive discourse prior to initiating a lawsuit.
Unfortunately for Binance, nervous bank representatives are beginning to “put on hold” their connections with the cryptocurrency trading behemoth due to the fact that they are now embroiled in litigation.
Adopting Crypto-to-Crypto Transactions
Fiat withdrawals would be stopped starting from June 13 until a later date, according to a tweet from Binance.US, which explained that this was necessary because banking partners had backed out of agreements with them.
Theoretically, a cryptocurrency investor wouldn’t need to worry too much about this since they could still cash out by transferring their stablecoins to another exchange. However, cautious investors can still choose to leave the markets at this time.
At this time, this choice only applies to Binance.US. Regarding fiat withdrawals for Binance itself, no notice has been given. This is obviously not off the table, though. Speaking representatives for Binance have not disclosed which of the banks they partner with have broken up their collaboration.
Binance has always done business with numerous such institutions concurrently, including Cross River Bank, Axos Bank, and the three recently dissolved banks that were the subject of considerable back-and-forth earlier on. This is mostly because of the scale of their operation.
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