In a significant policy change, Binance US, the American arm of global cryptocurrency exchange Binance, has decided to withdraw FDIC insurance coverage for user funds. This move comes amidst an ongoing legal battle with the US Securities and Exchange Commission (SEC), which has accused the exchange of violating federal securities laws. Previously, Binance US users were protected by FDIC insurance, providing a level of security for their cryptocurrency holdings. However, the updated terms of service now explicitly state that digital assets are not legal tender and are not backed by any government, removing the protection provided by the FDIC. This change places the responsibility for asset security on the users themselves. The withdrawal of FDIC coverage is connected to the SEC lawsuit filed against Binance, Binance US, and its founder, Changpeng Zhao (CZ). The SEC alleges various securities law violations, including falsely declaring trading controls and engaging in unregistered securities sales. The regulator also claims that CZ and Binance secretly controlled the operations of Binance US, raising concerns about transparency and potential conflicts of interest. Additionally, the SEC alleges that customer funds were covertly transferred to a separate entity under CZ’s control. The SEC’s actions have not only impacted Binance US but have also drawn international regulatory scrutiny. In response to the lawsuit, Binance has withdrawn from operations in several countries, highlighting the global implications of regulatory actions in the cryptocurrency space.

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Information	Details
Geography	North America
Countries
Sentiment	negative
Relevance Score	1
People	Changpeng Zhao
Companies	US Securities and Exchange Commission (SEC), Federal Deposit Insurance Corporation (FDIC), Merit Peak Limited, FDIC, Binance US, Securities Investor Protection Corporation (SIPC)
Currencies	None
Securities	None