In a recent update of Binance’s Terms and Conditions, the exchange revealed that it would block US citizens from using the platform. This restriction is necessary so that the company can develop and launch a dedicated American platform, which will be compliant with all applicable regulations in the country.
Commenting on this sudden change, Binance’s CEO, Changpeng Zhao, tweeted the following:
There will be a few restrictions on https://t.co/9rMMAmtCxH accompanying this. But some short term pains may be necessary for long term gains. And we always work hard to turn every short term pain into a long term gain. https://t.co/gl1M1cwPYB
— CZ Binance 🔶🔶🔶 (@cz_binance) June 14, 2019
For the moment, Binance has announced plans to collaborate with BAM Trading Services to create the dedicated US exchange. The new platform will be a fiat-to-crypto exchange; however, during the early stages of development, it will probably support a limited variety of crypto, starting with the Binance Coin (BNB), Bitcoin and Ether.
Binance has already started launching fiat-to-crypto exchanges in other locations. Among them are Uganda and Singapore. Both of these local exchanges support a limited number of cryptocurrencies as well.
According to the recent CryptoCompare Benchmark Rankings report, Binance holds the eight position of the top ten cryptocurrency exchanges. It was given an A grade, which is the second-best rating according to the CryptoCompare grading system.
While Binance attributes about fifteen per cent (15%) of its’ traffic to US-based users, this figure cannot be compared to the early days of the exchange when more than thirty per cent (30%) of all traffic was coming from the US.
Binance is not the first exchange to be bothered by the unfavourable regulatory climate in the US. Bitfinex and BitMEX started restricting access for US users in 2017, as they couldn’t provide services compliant with the regulatory framework in the country.