America is world-renowned for its freedom and as a land of opportunity, but this is quite the opposite when it comes to cryptocurrency exchanges. A number of prominent exchanges have opted not to serve U.S. citizens. This has been a growing trend in the last few years. The fact is, the list of trading platforms avoiding the U.S. is growing still, with the most recent being Bancor. The platform announced that it would block U.S. citizens from using its website to convert tokens. But to the surprise of everyone, Binance has decided to enter the US market.
Mass exodus
Regulation Is the main culprit. The lack of clear regulation is the main reason why crypto exchanges are increasingly shying away from the US. Exchanges complain about the uncertainty of U.S. securities legislation, about the failure of legislators to respond quickly enough to the rise of crypto with corresponding laws, and about how the lack of a transparent regulatory framework is putting America’s domestic cryptocurrency industry at a competitive disadvantage. Even with the regulatory hurdles, access to US markets remains crucial as a large volume of transactions, to be exact, 30 percent of spot volume in Bitcoin takes place in there. This is something exchanges are unable to stay away from.
Exits from the US
The first exit happened in August 2017, when Bitfinex announced that it would “be discontinuing services to our existing U.S. individual customers”. Then the biggest exchange in terms of BTC/USD trading volume, Bitfinex blamed crypto-fiat banking difficulties for the decision. It took a while before the next platform shut its doors to US customers. The first to do so was Poloniex, which stopped offering trades in nine cryptocurrencies to U.S. customers in May of this year, citing unclear securities legislation as its motivation. Then came Bittrex, which barred U.S. users in June from trading in 32 currencies, and was soon followed by Bancor, which excluded U.S. customers completely from its web-based platform.
Binance
Binance is a Chinese company dealing with cryptocurrency in a number of ways. When the Chinese government cracked down crypto, Binance moved its operations overseas mainly to Malta. Since then the company has been trying to make a mark in the industry. Since early 2018 Binance is considered the largest cryptocurrency exchange in the world. The company has shown an aggressive expansion strategy especially during the crypto winter, these included the initiative to open a decentralized bank and enabling purchases with credit and debit cards. Binance had recently announced Catherine Coley as the CEO of its Binance-US platform. She has experiences such as heading the institutional foreign exchange at Morgan Stanley, and this hiring had already spread rumors of the US expansion which has now turned out to be true.
Entry into the US
For a company that has long stayed away from the US specifically because of regulations, this marks a major turning point. The CEO of Binance Changpeng Zhao (better known as CZ), who was critical of his company coming under US scrutiny had this to say, “The U.S. has always been a very important market; globally it’s one of the biggest markets for any business, including in cryptocurrency. We want to be fully compliant”. Binance will currently operate in 12 states in the US, including New york. We have to keep in mind that the sheer size and capital they posses is one of the reasons Balance was able to comply with all regulations, something a smaller entity wouldn’t normally have.
Binance’s entry into the US market is a blessing for US customers who have been losing access to exchanges in the last two years, and the domino effect might force more exchanges to resume operations in the country. Despite the relative hostility of the current regulatory environment, industry figures are hopeful that it’s only a matter of time before the U.S. government and legislature come through with clear and workable crypto regulations. This incident paints a dark picture of the reality of our financial world. But no matter how much anyone hates the US or its petrodollars, in today’s world, they still reign king, even for crypto exchanges and access to that market is crucial at any cost.
Follow us on Twitter, Facebook, Steemit, and join our Telegram channel for the latest blockchain and cryptocurrency news
