A top crypto exchange is basically evicting American asset holders from its platform in order to make a big change.
Binance is a big name in cryptocurrency – Friday, we have news that the large-volume exchange has decided to create a whole new sandbox for American investors.
Unfortunately, that means that current American users have to get their crypto out of the existing platform now.
Technically, Americans can leave their holdings in Binance-adjacent wallets, but will not be able to trade after September 12.
Nikhilesh De at Coindesk goes over how Binance is using its terms of use as the vehicle for tightening up its policies and provisions.
“In an updated terms of use agreement revised on June 14, the exchange’s general site notably stated that ‘Binance is unable to provide services to any U.S. person.’” De writes.
Six U.S. states had previously been identified by Binance as “restricted areas” for trade.
The exchange’s CEO, Changpeng Zhao, has tried to mollify investors with the promise of longer-term benefit:
“Some short term pains may be necessary for long term gains. And we always work hard to turn every short term pain into a long term gain.”
(to wit: sometimes you et the bar, sometimes the bar … ets you.)
The news today out of Binance underscores the trouble that platforms can have with U.S. regulations, which are not as clear-cut as many would like them to be, and can impose quite a bit of liability on operators.
We only have to look at Kraken, another major global exchange, pulling out of New York months ago to understand how tricky all of this is for the entities that are setting up these trading platforms.
In the abstract, a separate Binance platform for U.S. traders seems like a great idea, but it will require some inconvenient heavy listing lifting as Americans with current involvement pack up their things and go.
Some traders are also drawing strange conclusions.
“This is wrong and political,” writes Francis H Erdman III in a comment on the Cointelegraph story, before descending into expletive-and-epithet-laden ranting. “Binance is penalizing US traders because its leadership does not like President Trump. “
Others point to how the move will affect coin markets.
“Regulations getting tighter for these exchanges and users from US,” writes John Sherwin. “I feel bad but at the same time feel good that DEX’s and privacy coins like Veil will become more popular because of these tightening regulations.”
Certainly, American traders may have to make some frustrating and unsatisfying choices in the short term. Stay tuned.
