Binance.US Suspends US Dollar Deposits, Prepares to Pause Dollar Withdrawals as Early as June 13

Crypto exchange Binance.US said on Thursday it is suspending U.S. dollar deposits and that its banking partners are preparing to pause fiat dollar withdrawal channels as early as June 13, just days after U.S. regulators sued Binance and its CEO Changpeng Zhao​.

Furthermore, it announced the suspension of its OTC trading and the delisting of more than 100 trading pairs​, most of which are USDT pairs, earlier that day.

The U.S. arm of the world's largest crypto exchange said in a tweet at 10:33 p.m. EDT (0233 GMT Friday) that the move comes as it is taking "proactive steps" in its transition to a crypto-only exchange for the time being.

Trading, staking, deposits and withdrawals in crypto would remain fully operational, the exchange said in a notice to its customers.

On Monday, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its founder Zhao, and subsequently sued Coinbase (COIN.O), the largest U.S. cryptocurrency platform, a day later.

The developments mark a dramatic escalation of a crackdown on the industry by U.S. regulators, following the implosion of FTX last year.

U.S. financial regulators had said earlier on Thursday that they supported a freeze on Binance's assets, according to a U.S. SEC filing to a federal court and made public.

"Binance.US is a considerably smaller business than their international group. Halting of withdrawals is obviously going to create or spur quite a bit of worry and panic," said Matthew Dibb, COO of Singapore crypto platform Stack Funds.

"But day after day for the last week, Binance has been hit with various types of comments and issues from the SEC and regulators, so this was really to be expected."

In its Thursday tweet, Binance.US said that the SEC's take on cryptocurrency is "extremely aggressive and intimidating", adding that it will continue to "vigorously defend ourselves, our customers, and industry against the meritless attacks of the SEC".

The crypto industry has attacked U.S. SEC chair Gary Gensler in recent days following the lawsuits, though he has since rejected criticism that the agency is trying to crush the crypto industry.