The operations of Binance.US, which is the American arm of the well-known Binance Exchange, have been severely hampered due to its inability to secure a banking partner. This predicament has caused a great deal of consternation for the exchange, as it has already faced a multitude of obstacles in recent times. In addition, the value of BNB, the exchange’s native token, has witnessed a slight decline, with investors placing their bets on further drops in its price.
U.S banks refuse Binance funds
According to an 8 April report from Wall Street Journal, Binance.US has been encountering difficulties finding a banking partner to handle its clients’ funds. The exchange has been struggling to establish a new bank partner to facilitate the transfer of fiat currency in and out of its platform for its clients.
The recent collapse of Silvergate and Signature Bank has left the exchange relying on intermediary banks to store funds on its behalf.
The unavailability of a direct banking partner has impacted Binance.US customers. In a recent update, the exchange stated it was shifting to new banking and payment service providers over the coming weeks. However, it also mentioned that the transition would temporarily impact some of its U.S. dollar deposit services.
Temporary banking solution
As reported by the Wall Street Journal, Binance.US has been using the services of Prime Trust LLC, a FinTech firm specializing in cryptocurrency services, to store its customers’ cash. According to a spokeswoman from Prime Trust, any funds received from Binance.US clients are kept in the company’s network of banking partners.
Binance Holdings Ltd., the global affiliate of Binance US, was recently sued by the Commodity Futures Trading Commission. The suit was for allegedly violating regulations and rules designed to prevent financial crimes in the U.S.
Although Binance denied any wrongdoing, this legal action may have made securing banking partners more challenging for Binance.US. Additionally, the regulatory landscape for cryptocurrency in the U.S. has become more complex in recent times, which could have also contributed to the difficulties faced by the exchange in finding a banking partner.
How did BNB react?
The daily timeframe chart of BNB indicated that it has faced challenges over the past few weeks. As of this writing, BNB was trading at approximately $310, experiencing a minor loss of less than 1%.
While BNB was still trading above its short and long Moving Averages (yellow and blue lines), it may dip below these averages if the decline continues. Moreover, the current trend for BNB was bearish, as indicated by the Relative Strength Index (RSI) line.
Source: TradingView
In addition, at the press time price level, investors anticipated a further decline in Binance Coin. According to the funding rates data from Coinglass, the dominant positions on most exchanges were short, suggesting that investors were bearish about BNB’s outlook.
Although there were some long positions, the shorts carried the majority of the market sentiment as of the time of writing.
Source: Coinglass
