Binance.com will no longer serve registered U.S. users within 90 days, and will open a separate U.S.-only version – Binance.us – of the platform in partnership with BAM Trading Services. This news is elaborated by three separate documentations released by the leading exchange in the past day.
Binance announced yesterday that it will “license its cutting-edge matching engine and wallet technologies to” BAM Trading Services, who were approved only days ago by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The release emphasized “[serving] the U.S. market in full regulatory compliance,” as well as “a focus on the trading of mainstream cryptocurrencies with liquidity.”
Although the opaque announcement is couched in little to no explanation, a new clause in the nearly 6,000 word document clearly elaborates the compliance message: “Binance is unable to provide services to any U.S. person.”
There will be a few restrictions on https://t.co/9rMMAmtCxH accompanying this. But some short term pains may be necessary for long term gains. And we always work hard to turn every short term pain into a long term gain. https://t.co/gl1M1cwPYB
— CZ Binance (@cz_binance) June 14, 2019
A Matter of Compliance
The present move should come as no surprise, as Binance began blocking customers from the U.S. and 28 other countries from its new decentralized exchange platform two weeks ago.
The exclusion of U.S. customers very likely has to do with concern in that country surrounding regulation and compliance. Namely, securities are highly regulated in the U.S., and law enforcement in the country has already shown its draconian face with the late 2018 prosecution of EtherDelta’s founder Zach Coburn. EtherDelta is an open ERC-20 decentralized exchange.
1. Binance US coming.
2. Binance may move US users (reportedly 25-30% of total) from https://t.co/PNtC8MFp7I to Binance US.
— Alex Krüger (@krugermacro) June 14, 2019
The issue of determining which digital assets are securities and which aren’t, especially in the U.S., has been a constant thorn in the side of the crypto industry for more than a year. By simply excluding some users from trading any tokens that might security tokens, Binance is keeping with its tendency to self-regulate.