The American subsidiary of the crypto exchange Binance confirmed that customers’ accounts are not insured with FDIC.
BinanceUS is an independent US subsidiary of Binance crypto exchange, a crypto exchange that ranks at the top in terms of 24-hour trading volume on the platform. This year, America’s two largest financial regulators, the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC), independently sued this exchange.
On October 17, 2023, BinanceUS sent an email to its customers that its customer accounts are no longer insured with the Federal Deposit Insurance Corporation (FDIC).
In the updated terms of use, the BinanceUS team wrote: “Your accounts and digital assets are not eligible for FDIC insurance protection.”
With this update, the BinanceUS team also confirmed that customers are no longer eligible to withdraw funds directly in US dollars. Instead, they must convert their US dollars into US dollar-pegged stablecoins (USDC, USDC) or crypto assets to withdraw them.
Previously, BinanceUS accounts were insured for up to $250,000 in 2019. information has been removed from the BinanceUS website, but we can view this information at web.archive.org.
FDIC is a US government agency that provides insurance services to US citizens to protect them against monetary loss due to bank failure. FDIC insurance coverage up to the depositor coverage limit, which is currently $250,000.
The crypto exchanges Binance and BinanceUS were sued by the SEC body in June this year, and after the lawsuit, the BinanceUS team delisted more than 100 crypto asset trading pairs, and that decision caused another major downfall in the trading volume of the BinanceUS scholarship.
Four months ago, before the SEC lawsuit, Binance was among the top 10 crypto exchanges in terms of 24-hour trading volume, but currently the exchange ranks 53rd.
Also read: Former CFTC official backs urgent regulatory framework for crypto & stablecoin