Binance.US Scrambles to Find Banking Partners

The American partner of Binance is reportedly struggling to find a bank for its customers.

The problem began following the downfall of Signature Bank and Silvergate Capital, two banks that catered to the cryptocurrency industry, The Wall Street Journal reported Sunday (April 9), citing sources familiar with the matter.

It is the latest in a series of setbacks for Binance, the world’s largest cryptocurrency company, and its U.S.-based affiliate, Binance.US.

According to the WSJ, Binance.US had previously sent dollar deposits to Signature or Silvergate. Then last month, Silvergate voluntarily liquidated itself, while Signature was taken over by regulators in one the largest bank failures in U.S. history. The closure of the lenders has left crypto companies seeking new banking partners.

In the interim, Binance.US is using at least one middleman to keep money on its behalf, the sources said. And because the middleman is keeping the funds at its bank, it can slow the process of moving money.

PYMNTS has reached out to Binance.US for comment but has not yet heard a reply.

Sources tell the WSJ Binance.US has unsuccessfully bid to open direct banking relationships with banks that include Cross River Bank, the New Jersey-based lender that works with some crypto companies and FinTech firms, as well as Pennsylvania’s Customers Bancorp.

The partnerships never materialized, the sources said, because the banks were concerned about regulatory risks.

Last month saw the news that former Binance.US. CEO Catherine Coley had hired an attorney. A report by Reuters said Coley — who had launched the American arm of Binance before leaving the company two years later — did so as the government launched a probe into Binance.

That came as the U.S. Commodity Futures Trading Commission (CFTC) charged Binance CEO Changpeng Zhao, Binance Holdings Limited, Binance Holdings (IE) Limited and Binance (Services) Holdings Limited in federal court with violating the Commodity Exchange Act and CFTC regulations.

The CFTC also charged Samuel Lim, who served as Binance’s chief compliance officer from 2018 to 2022, with aiding and abetting these violations. Coley is not named in the CFTC suit, the Reuters report said.

In a statement to PYMNTS, a Binance spokesperson said the company has been working alongside the CFTC for two years, and that it finds the filing “unexpected and disappointing” after boosting its compliance team from 100 to 750 in the last two years.