Crypto Traders Mull Binance Alternatives As U.S. Ban Looms
Less than 10 days left until major crypto exchange Binance closes its main trading platform for U.S. residents, while the exact date when the American branch of the company, Binance.US will launch is unknown. As the exchange remains tight-lipped about the possible transitional period, local traders are already considering alternatives. (Updated on September 4: a comment by Binance CEO has been added).
For example, a poll posted by Reddit user u/millzcrypto on September 2 (now it has 200 responses), shows what options Binance users are considering. (It is estimated that 20% to 30% of Binance users are U.S. residents.)
At the moment, most respondents stated that they are going to use “other,” not mentioned exchanges (34%), followed by KuCoin (30%), Coinbase Pro (21%), and Kraken (12%).
Other exchanges mentioned in the comments include Oceanex, Switcheo, Nash, IDEX, Kyber, and Bittrex. Alternatively, some users claim that they are going to stay with Binance, and access the platform using a VPN service.Card
However, as reported by Cryptonews.com, using a VPN on centralized exchanges that have geoblocked the U.S. or that have limited assets for U.S. customers is a risky affair because should the user be required to fill out a KYC (know-your-customer) form to withdraw funds, a loss of funds could be the result if the user should not have been using the platform in the first place.
Binance is going to prohibit access to its main platform, Binance.com for the U.S. residents starting September 12. Meanwhile, in mid-August, Binance CEO Chanpeng Zhao has already stated that the launch of the U.S. platform will happen “in a month or two” with a definite date yet to be announced.
Binance did not respond to our multiple requests for comment. However, on September 4, Binance CEO Changpeng Zhao confirmed that the exchange "should not have any US users, as per our TOU."
Although Binance.com isn't the only exchange platform by Binance, it's localized subsidiaries Binance Jersey, Binance Uganda, and Binance Singapore operate mainly as fiat onramps with a few trading pairs and do not allow traders from the U.S. also. At the moment, even Binance DEX, a non-custodial exchange, geoblocks traders from the U.S. The U.S. user ban is meant to minimize regulatory uncertainties as the status of certain digital assets remains unclear in the U.S. Moreover, even the native token, Binance Coin (BNB), might cause the company problems in the U.S. However, BNB is among 30 crypto assets that the American branch is considering to list.
Read more: Crypto Trading Getting More Difficult in the U.S., What Can Be Done?