Citing “regulatory uncertainty”, Binance chiefs will prohibit access for residents in 13 states – including New York, Washington, Texas and Florida – to the six cryptocurrencies supported by the platform. The often-controversial exchange said it would be working to allow access to its US arm for the excluded states over the coming months. Binance bosses – including Changpeng ‘CZ’ Zhao – have been tight-lipped about the reasons behind the restricted access to Binance.US, which launches only four months after American users of binance.com were barred from the site.
The US blackout was enforced only a month after hackers pocketed 7,000 bitcoins worth a staggering $40 million in a single transaction described by Malta-based Binance – one of the world’s largest crypto exchanges – as a “large scale security breach”.
The theft rocked the cryptocurrency world and put the brakes on bitcoin’s surging price. It also triggered US President Donald Trump to twist the knife on a movement considered “the enemy of the US dollar” as he slammed cryptocurrency as a worthless idea “based on nothing but air”.
The move to launch Binance.US was only officially announced yesterday on Twitter, and has been welcomed by crypto enthusiast the world over.
Some critics, however, say the lack of clear explanation about the restrictions may hinder Binance’s return to the US market.
“On the face of it, this is a good move and a bold one to make by Binance,” said New York-based analyst Safuwan Nizam.
“But when you look at the states which won’t be able to access the exchange, and the number of people that includes, it becomes a complicated and disjointed piece that simply doesn’t look quite as attractive as it sounded at first.
“I think in order to give customers some confidence in what they might want to invest in, you really do need to offer them some reasonable level of intelligent explanation behind the restrictions.”
Binance CEO Changpeng Zhao’s only reference to problems in the US was a cursory remark last month when he said “there are a lot of things in flux” when talking about regulation.
The US arm – confirmed as a separate entity to binance.com, therefore meaning assets won’t be able to be moved automatically between the two exchanges – will be led by CEO Catherine Coley.
Announcing the exchange yesterday, the former Ripple executive expressed disappointment over the restrictions.
She tweeted: “Although it is upsetting that we cannot offer Binance US in the states where I grew up and earned my education at this time, please rest assured that this is just the beginning, and it is our mission to bring access to those of you in these states many of us call home.”
The exchange launches with support for six currencies – BTC, ETH, XRP, BCH, LTC, and USTD – but more are set to be added before the end of 2019.