After the failures of Signature and Silvergate, both seen as friendly to crypto companies, no U.S. banks are willing to work with Binance.
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The U.S. affiliate of global crypto exchange Binance has struggled to find a bank for its customers’ cash after the failure of Signature Bank left it without a key banking partner, people familiar with the matter said.
Users’ dollar deposits were previously sent to either Signature Bank or Silvergate Capital Corp., according to Binance.US’s website. The failures of Signature and Silvergate, both seen as friendly to crypto companies, left many crypto firms rushing to find new banking partners.
As a stopgap, Binance.US is using at least one middleman to store funds on its behalf. Because money is held at the middleman’s banks, it can slow down the process of sending and moving funds, the people said.
The key difficulty for Binance.US is finding a bank to directly hold its customers’ dollars. At crypto exchanges, bank accounts for user deposits and trading are typically separate from those used for corporate operations, such as payroll and one-off expenses.
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Binance.US has unsuccessfully sought to establish direct banking relationships with banks including Cross River Bank, the New Jersey-based lender that serves some crypto and financial-technology firms, and Customers Bancorp Inc., a Pennsylvania-based regional bank, in recent months, the people said.
According to a recent analysis from the Cato Institute assessment report published on Tuesday, Central Bank Digital Currencies are a foundational threat to America’s economic systems.
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