Cryptocurrency exchanges are struggling to find customer banks

Cryptocurrency exchanges are struggling to find customer banks

The US branch of cryptocurrency exchange Binance is struggling to find a bank that can handle customer funds after Signature Bank was forced to close, according to Reuters.

Previously, deposits from the cryptocurrency exchange were sent to either Signature Bank or Silvergate Capital, both of which were seen as crypto-friendly banks. However, after the banks disappeared in the banking crisis, the exchange had to work to find a new banking connection.

According to the Wall Street Journal, Binance has attempted to establish contact with both Cross River Bank and Bancorp clients, but without much success. The paper claims that banks should be concerned about potential regulatory risks.

“We work with many banking and payment providers in the US and continue to integrate new partners as we update our internal systems to create a more stable platform and provide additional services,” a Binance spokesperson told the Wall Street Journal.

Defendant

The lawsuit is filed by: Founder and CEO Zhao Changpeng. Image: Bloomberg

Banks’ concerns do not come like lightning out of the blue. In March, Binance, the world’s largest crypto exchange, was sued by the US Commodity Futures Trading Commission (CFTC) for violating regulations. In addition to the company, CEO and founder Changpeng Zhao has been sued.

The background to the lawsuit is that the CFTC believes the company is operating illegally in the country. The lawsuit states that much of Binance’s reported trading volume and profitability came from the “massive recruitment and outreach” of US customers.

After the lawsuit became known, investors pulled $1.6 billion from Binance.

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Dalila Awolowo

Dalila Awolowo

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