Binance.US, a prominent cryptocurrency exchange, has recently made significant updates to its terms of service, signaling a significant change in its withdrawal options for users.
The modifications, which were introduced on October 16th, mainly pertain to the “BAM Fiat Wallet” section, focusing on services related to the custody of United States dollars.
In the revised terms of service, Binance.US explicitly states that users now have the option to “convert” their holdings in U.S. dollars into stablecoins or other digital assets in order to facilitate withdrawals from their accounts.
This shift has raised concerns among cryptocurrency enthusiasts, with some expressing their apprehensions on social media platforms like Twitter.
One observer on Twitter commented, “Binance seizes USD. Don’t worry, you can buy Tethers printed out of thin air or other questionable cryptocurrencies.”
This sentiment reflects the unease among users about the changing dynamics of USD withdrawals on the platform.
It’s worth noting that, consistent with previous updates, Binance.US emphasizes that digital assets held on the platform are not covered by insurance protection provided by the Federal Deposit Insurance Corporation (FDIC).
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The company states that in the event of terminating its relationship with a USD custodian without finding a replacement, it will notify users and provide a window for withdrawing their U.S. dollar deposits.
Any funds not withdrawn by the specified deadline will be converted into stablecoin digital assets and transferred to users’ digital asset accounts.
This recent update differs significantly from the terms of service in May 2023, where Binance.US had previously indicated that it had been working with USD custodians to ensure the safety of U.S. dollar deposits in omnibus accounts at FDIC-insured banks, potentially making them eligible for FDIC insurance coverage.
Binance.US has been undergoing a transition to becoming a “crypto-only exchange” since June 2023, leading to the suspension of USD deposits and withdrawals.
This suspension has been in place until the exchange can establish secure banking partnerships, and it reflects the ongoing challenges the platform faces in maintaining its fiat on-ramps and off-ramps.
In summary, the recent changes to Binance.US’s terms of service indicate a significant shift in its withdrawal options for users, moving away from direct USD withdrawals and encouraging the conversion of USD holdings into digital assets.
This aligns with the platform’s transition towards becoming a crypto-only exchange and the ongoing challenges it faces in its fiat operations.
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