Following the meltdowns in the crypto space, US regulators are monitoring crypto businesses closely. Binance is limiting its operations outside the US according to its CEO.
Seeking permission first
Binance has announced that it is scaling back on some of its dealings in the US. This announcement follows heightened regulatory scrutiny from authorities in the country. In a Friday tweet, the Binance CEO confirmed that the company is considering severing relationships with US-based crypto projects pending what he termed seeking “permission first.”
The decision to scale back on its US operations will affect its partnerships with crypto projects operating in the country. It will also result in the delisting of tokens of such projects.
“We pulled back on some potential investments, or bids on bankrupt companies in the U.S. for now. Seek permission first,” Changpeng Zhao, the Binance CEO wrote in a tweet.
The report from Bloomberg said that the company plans to stop its dealings with financial services companies in the US as authorities in the country continue to scrutinize the operations of the Dubai-based exchange and its subsidiary in the US.
A false report
The reassessment means that several tokens of US-based entities will be delisted. This may include USDC, the stablecoin from Circle, the report said.
In a swift reaction to the report, the Binance CEO said that the story about delisting all tokens originating from US companies is “false.”
An earlier report by Reuters said that the parent company of BinanceUS, Binance Global, moved more than $400 million from the US subsidiary, raising questions about the purported independence of the US-based entity. The fund was moved to another exchange that is managed by Zhao.
A need to protect global user base
While reacting to the news that it is scaling back from US operations, a spokesperson for Binance said,
“Like every other blockchain company, we are conducting a careful cost-benefit analysis and will pivot our business as necessary to protect our global user base,”
The statement did not elaborate on what investments Binance would be pulling out from due to the heightened regulatory scrutiny on cryptocurrency firms operating in the US.
The recent move by the US agency to monitor the activities of crypto companies is coming after months of meltdowns that led to the collapse of several blockchain entities.
Halting USD transfers
The top financial regulator in New York has already ordered the company behind the Binance stablecoin (BUSD) to cease its issue within its jurisdiction.
As the saga unfolded last month, a prominent bank that is a Binance partner in the US, Signature Bank, said that it was scaling back its exposure to crypto companies. In response, Binance suspended dollar transfers earlier this month.