SEC Crackdown Aftermath: Binance.US Stops Dollar Deposits, Robinhood Removes Three Tokens

Binance's decision came after the SEC sought an asset freeze through a court order.

The SEC lawsuit targets Binance, CEO Changpeng Zhao, and the operation of Binance.US. ( Image Source :Getty )

Binance's US affiliate has decided to halt dollar deposits, and popular trading platform Robinhood Markets announced the delisting of certain crypto tokens. These actions come as the US Securities and Exchange Commission (SEC) intensifies its crackdown on the cryptocurrency sector.

Binance.US, considered the independent partner of Binance, took to Twitter on Thursday to reveal that its banking partners were preparing to cease dollar withdrawal channels by June 13. The decision came after the SEC sought an asset freeze through a court order. Customers have until Tuesday to withdraw their funds.

This development deals yet another blow to the world's largest cryptocurrency exchange and raises concerns about the survival of its US operation. The SEC's lawsuit against Binance alleges various civil charges, including trading volume manipulation and commingling of customer assets, which Binance denies.

Clara Medalie, Director of Research at Kaiko, a digital asset data provider, remarked, "This is very serious for Binance.US. The inability for Binance.US to offer USD trading services in a region the exchange was specifically built to operate in is an existential threat."

Robinhood, on the other hand, announced on Friday that it would be removing three cryptocurrency tokens from its platform. This decision was made in response to the SEC's identification of these tokens as securities in its lawsuit against Binance and a separate action filed against Coinbase the following day. It is evident that the SEC's litigation is already causing ripple effects throughout the crypto market.

The SEC's lawsuit, filed on Monday, targets Binance, CEO Changpeng Zhao, and the operation of Binance.US. It alleges 13 charges against Binance, accusing the exchange of engaging in a "web of deception," inflating trading volumes artificially, diverting customer funds, and claiming false independence of the US entity while secretly controlling it.

The future of Binance.US hangs in the balance as it confronts these serious legal challenges. The impact of the SEC's actions extends beyond Binance, affecting the broader crypto industry and prompting exchanges and platforms to reevaluate their operations and token offerings in light of the regulatory landscape.