Binance’s US arm struggles to find bank to take its customers’ cash
The U.S. arm of cryptocurrency exchange Binance is struggling to find a bank to handle its customers’ cash after the failure of Signature Bank last month, the Wall Street Journal reported on Saturday, citing people familiar with the matter.
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Previously, the deposits were sent to either Signature Bank or Silvergate Capital Corp, both seen as crypto-friendly banks. However, after both failed, the exchange is rushing to find a new banking partner, according to the report.
Binance.US is using at least one intermediary to store funds, the report said, adding that since the money is being held by a third party, it can slow down sending and moving funds.
The company has unsuccessfully tried to establish relationships with Cross River Bank and Customers Bancorp Inc , the report said, adding that banks are reluctant due to concerns over regulatory risk.
All three companies did not immediately respond to a Reuters’ request for comment outside normal business hours.
“We work with multiple U.S.-based banking and payment providers and continue to onboard new partners while upgrading our internal systems to create a more stable fiat platform and offer additional services,” a spokesperson for Binance.US told the WSJ.
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Last month, the U.S. Commodity Futures Trading Commission (CFTC) sued Binance along with its CEO and former top compliance executive, alleging that they were operating an “illegal” exchange and a “sham” compliance program. Since the lawsuit, investors withdrew $1.6 billion from Binance.
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