- Binance no longer holds USD, requiring BUSD conversion for withdrawals.
- FDIC insurance has been removed, affecting USD deposits.
- Concerns arise about BUSD’s registration as a security in response to the changes.
Earlier today, crypto trader Asher Hopp tweeted that Binance.US has upgraded its Terms of Services (ToS). The updated language is likely to alarm some users: Binance.US announced that it no longer holds USD, users who previously deposited USD can no longer withdraw it, and there is no longer any FDIC insurance.
According to Hopp This leaves users wishing to withdraw USD from Binance with the sole option “sending BUSD”. Binance’s new terms state that U.S. dollar assets may be converted into stablecoins, and then withdrawn. Hopp questioned the regulatory status of BUSD in the United States, suggesting that it may be an unregistered security.
At the end of August, Binance announced that it would end support for BUSD in 2024. The declaration highlighted that BUSD’s embattled issuer, Paxos Trust Company will discontinue the redemption of BUSD by February 2024. Therefore, Binance encouraged its users to take action and convert their BUSD holdings.
Hopp shared the screenshot of an email Binance sent across to its customers, notifying them that their USD holdings have been converted into BNB/BUSD.
This is the second development from Binance in the last few hours that has caught the crypto community by surprise. Yesterday, Binance published a blog post stating it will cease accepting new users from the United Kingdom starting from Monday.
According to the blog post, this temporary measure is necessary to comply with the crypto marketing regulations within the country. Under the new regulatory framework, which came into effect on October 8, companies that hold registration with the United Kingdom’s Financial Conduct Authority (FCA) have the authority to self-approve their advertisements. Alternatively, businesses can opt to engage authorized entities to review and approve their advertisements on their behalf.
Despite Binance’s partnership with a company named Rebuildingsociety.com to secure approval for its promotions and advertisements in the UK before the regulations took effect, the FCA recently declared that Rebuildingsociety.com lacked the necessary authorization to approve cryptocurrency advertisements.
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