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TLDR Binance US has announced that its deposits are no longer insured by the FDIC. Regulatory moves and their impact on the crypto market. Binance’s American entity has recently informed its users that their cryptocurrency holdings with the exchange are no longer FDIC-insured. This update comes as Binance US adjusted the deposit insurance language in its terms of service, citing guidance from the Federal Deposit Insurance Corporation (FDIC). In 2019, Binance US initially announced that user accounts were insured for up to $250,000. They stated that all USD deposits are held in pooled custodial accounts at multiple banks that are FDIC-insured. Binance US clarifies its stance on deposits The custodial accounts were structured to provide pass-through FDIC insurance coverage up to the $250,000 depositor limit. The FDIC, established in 1933 during the Great Depression, was created to protect Americans from losing their money if their banks were to collapse. This government entity ensured that deposits were safe up to a certain amount. However, the updated terms of service from Binance US now clearly state that accounts and digital assets are not eligible for FDIC insurance protections. This means that users’ assets and accounts on the platform are no longer covered by FDIC insurance, leaving them without this level of protection. Furthermore, the update reveals that users will no longer be able to withdraw U.S. dollars directly from their Binance US accounts. Instead, they must first convert these dollars into stablecoins or another cryptocurrency. Stablecoins are cryptocurrencies that are pegged to a fiat currency, with popular USD-denominated stablecoins including Tether’s USDT and Circle’s USDC. This change in policy by Binance US aligns with a recent warning from the FDIC. The FDIC issued a statement cautioning individuals that money deposited with a “crypto-based financial services provider” is not FDIC-insured or protected. Regulatory…

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Filed under: News - @ October 17, 2023 8:14 pm