FDIC distances its insurance service for BinanceUS exchange
The American subsidiary of the Binance crypto exchange confirmed that customers’ accounts are not insured with FDIC.
BinanceUS is an independent American subsidiary of Binance crypto exchange, a top-ranked crypto exchange by 24-hour trade volume on the platform. This year, America’s top two financial regulators namely the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) sued this exchange independently.
On 17 Oct 2023, BinanceUS sent an email to its customers that its customer accounts are no longer insured with The Federal Deposit Insurance Corporation (FDIC).
In the updated terms of service use, the BinanceUS team wrote “Your accounts and digital assets are not eligible for FDIC insurance protections.”
With this update, the BinanceUS team also confirmed that customers are no longer eligible to withdraw funds directly in US dollars, instead, they are required to convert their US dollars to US dollar-pegged stablecoins (USDC, USDC) or crypto assets to withdraw.
Before this, BinanceUS accounts were insured for up to $250,000 in 2019. This information has been deleted from the BinanceUS website but we can see this information on web.archive.org.
FDIC is a US government body that provides insurance services to US citizens to protect them against money loss because of bank collapse. FDIC insurance coverage up to the depositor coverage limit, which is currently $250,000.
Binance & BinanceUS crypto exchanges were sued by the SEC body in June of this year and following the suit, the BinanceUS team delisted 100+ crypto assets trade pairs, and that decision caused another big downfall in the trade volume of the BinanceUS exchange.
Four months ago, before the SEC’s suit, Binance was among the top 10 crypto exchanges list by 24-hour trade volume but currently, the exchange is standing at 53rd position.
Read also: Former CFTC official supports an urgent regulatory framework for crypto & stablecoin
