Binance temporarily stunned U.S. customers Friday by announcing that they would be banned from the platform in 90 days, before coming up with an explanation for their actions just one hour later – they are teaming up with a FinCEN approved partner to launch a U.S. division. The action is the latest example of exchanges getting their regulatory ducks in a row as the authorities tighten their grip, as evidenced by the incoming FATF guidelines.
News Sparks Panic
The news of the restrictions for U.S. customers came via an innocent-looking update to Binance’s terms of use, which however included the following sentence:
Binance is unable to provide services to any U.S. person. Binance maintains the right to select its markets and jurisdictions to operate and may restrict or deny the Services in certain countries at its discretion.
Understandably, this initially alarmed U.S. users, many of whom took drastic action and predicted doom and gloom:
Exited my #binance coins after the announced US customers ban. Don’t wanna be in the storm while it lasts. First wanna see how this all resolves. Mid-term I guess everything besides $BTC and $ETH will drop significantly. Short term both should rise, mid-term to be seen.
— ThisIsNoAdvice ⚡ (@mcminimilk1) June 14, 2019
Look at Alt’s on Binance you mean? this US citizen ban thing will be the death of Binance this is just the start of traders dumping there shitcoins to leave the exchange
— Bitcoin Ryan (@Pvt_BitcoinRyan) June 14, 2019
It didn’t take long however (around an hour in fact) for the reason behind the change to become clear, as Binance announced a collaboration with BAM Trading Services to offer a separate platform for American investors, called Binance US.
https://t.co/AZwoBOy3iq will provide secure and reliable cryptocurrency trading to users in the United States.
We look forward to opening registrations soon. ?? pic.twitter.com/bQ6sctg3FK
— Binance.US (@BinanceAmerica) June 14, 2019
BAM is registered with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), allowing Binance legal access to the U.S. market, although this will likely require every customer to complete know your customer and anti money laundering checks, which could significantly reduce the customer base, at least initially. It will also be interesting to see which tokens Binance US will list, given that they will probably want to avoid being tied to any tokens that might be considered securities by the Securities and Exchange Commission (SEC).
Binance Tokens React Badly
The news had an immediate impact on the price of Binance’s BNB token, which saw a 9% drop Friday, along with Binance’s IEO tokens CELR, FET, and ONE, which all saw similar falls as holders divested themselves of Binance-related tokens. These sales were undoubtedly behind BTC’s push to $8,400 which also happened Friday, a move that might just have helped usher in another assault on $10,000.
