Binance.US Struggles to Find New Banking Partner After Signature Bank’s Exit

The United States arm of world-leading cryptocurrency exchange Binance.US is having difficulties trying to find a new banking partner following the unfortunate collapse of Signature Bank a few weeks ago.

Notably, Binance.US is now searching for a banking partner that will function as a fiat on-ramp and off-ramp for its clients. So far, attempts to form partnerships with financial institutions like Cross River Bank and Customers Bancorp Inc have proven abortive.

Before the upheaval in the U.S. financial system, Binance.US sends its user’s dollar deposits to either Signature Bank or Silvergate Bank, another financial institution that crashed and winded down operations.

These two banks were both considered crypto-friendly institutions until their final days. Therefore, their sudden exit has left many crypto exchanges stranded and in search of new banking partners.

Currently, Binance.US has to rely on intermediaries to store customers’ funds and their third-party method slows down the transfer of funds. Banks like Cross River Bank and Customers Bancorp Inc have declined to be the banking partner for Binance.US citing concerns over regulatory risks surrounding the global cryptocurrency exchange.

According to a Binance.US spokesperson, the company is working 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.”

Binance.US Sinks Into Severe Scrutiny

In the last two weeks, Binance has been charged with different lawsuits together with its Chief Executive Officer (CEO) Changpeng Zhao and other executives.

Independent U.S. regulator, the Commodity Futures Trading Commission (CFTC) filed a complaint against Binance for offering unregistered commodity trading while also keeping away information of the location of its executive offices.

Binance officials were accused of leveraging Virtual Private Networks (VPNs) to hide their location. The CFTC suspects that Binance was trying to intentionally avoid regulation by concealing the information. In the end, it was a case of U.S. law violation and the regulator requested for civil monetary fines and other ancillary remedies.

Also, the Moscowitz Law Group and Boies Schiller Flexner brought a $1 billion lawsuit against Binance, CZ, and three crypto influencers for promoting unregistered securities.