Binance Announces U.S.-Only Platform, Current U.S. Users Booted Within 90 Days

Colin Muller
  • U.S. customers to be booted from Binance.com within 90 days
  • Binance.us will open to service U.S. customers
  • BAM Trading Services to handle Binance.us compliance 

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.”

According to CoinDesk, BAM Trading Services is indeed registered with FinCEN; but little else is known about the organization.

Two other Binance releases have added some color to the news. The first, a cryptic press release coming just hours ago, warned customers that they may have to “furnish evidence” showing that their accounts are compliant with the exchange’s Terms of Use, or else be booted off the platform.

Accordingly, some users may be required to furnish evidence showing that their account registrations are consistent with Binance's Terms of Use. Binance regrettably cannot continue to serve users who are found to have violated the Terms of Use and are unable to demonstrate otherwise.

Binance press release

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.”

 

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.

 

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.

Crypto Trading Volumes Plummet in June, CryptoCompare Report Shows

Cryptocurrency trading volumes plummeted in June to “roughly half of the daily volumes” seen in May, according to the CryptoCompare June 2020 Exchange review report.

The report found that top-tier cryptocurrency exchanges, those with a high ranking on CryptoCompare’s Exchange Benchmark,  saw their trading volumes saw their spot trading volumes drop by 36% last month to $177 billion, while lower-tier cryptoassets exchanges saw their trading volumes drop by 53% to $466 billion.

unnamed.pngSource: CryptoCompare

CryptoCompare notes that last month the highest recorded trading volume in a single day on top-tier exchanges was of $9.26 billion. In comparison, in March’s Exchange Review, the cryptoassets data provider revealed that the March 12-13 crypto market crash led to high in daily trading volumes, as $75.9 billion were traded across exchanges in a single day. Top-tier exchanges traded $21.6 billion that day.

It’s worth noting that the spot volumes did not hit an all-time high, even during the March market crash. In July 2019 and December 2017, when the price of bitcoin hit its all-time high near $20,000, spot volumes hit record highs.

In June, cryptoassets trading platforms charging traditional taker fees represented 76% of the total exchange volumes, while those implementing the tans-fee mining (TFM) model represented less than 23% of the cryptocurrency space’s spot volume.

Fee-charging exchanges, the report adds, traded a total of $455 billion in June, as their trading volume dropped 48% since May. Trading platforms using the trans-fee mining model saw their volumes drop 45% since May, as they traded $141 billion.

Exchanges using the TFM model are seemingly gaining market share. While in March they represented less than 20% of the spot trading volume, in June their market share was of 23%.  As CryptoGlobe reported, these trading platforms often have unusually thin order books and low traffic.

FCoin, the cryptocurrency exchanges that started using TFM, has passed trading and withdrawals earlier this year over the shortage of crypto worth up to $130 million. The firm’s founder revealed that the platform was not hacked, but instead an internal system error gave users more rewards than they should have received.

Featured image by Austin Distel on Unsplash.