Binance’s US arm struggles to find bank to take its customers’ cash

After Signature Bank failed last month, the US division of cryptocurrency exchange Binance is having trouble finding a bank to handle its customers’ cash, according to a report published on Saturday by the Wall Street Journal, which cited people familiar with the situation.

Prior to this, the deposits were directed to Signature Bank or Silvergate Capital Corp, two institutions regarded as being sympathetic to cryptocurrencies. However, when both fell through, the exchange is reportedly scrambling to find a new financial partner.

Binance.According to the report, the US uses at least one intermediary to store money, and since the money is in the hands of a third party, transferring and moving money can take longer.

According to the article, the company has attempted to develop ties with Cross River Bank and Customers Bancorp Inc. without success. The report also stated that banks are hesitant because they are worried about regulatory risk.

A Reuters request for comment made after regular business hours received no immediate response from any of the three companies.

A representative for Binance.US told the WSJ that the company “works with multiple US-based banking and payment providers and continues to onboard new partners while upgrading our internal systems to create a more stable fiat platform and offer additional services.”

Binance, along with its CEO and former top compliance executive, were sued by the US Commodity Futures Trading Commission (CFTC) last month on charges that they ran a “illegal” exchange and a “sham” compliance programme. Investors have pulled $1.6 billion out of Binance since the lawsuit.