Binance.US accounts ‘not eligible’ for FDIC insurance protections

Binance US updated its terms of service to comply with the FDIC and finalize its transition to a crypto-only exchange

article-image

Igor Faun/Shutterstock modified by Blockworks

share

Binance.US made some changes to its terms of service on Monday.

In an email sent to customers and shared with Blockworks, Binance US removed the language stating that deposits were insured by the Federal Deposit Insurance Corporation. 

Additionally, customers must convert their US dollars to either a stablecoin or other digital asset in order to withdraw from the exchange. 

“Your Accounts and digital assets are not eligible for FDIC insurance protections. In the event you wish to withdraw US dollar funds from your Account, you may convert such US dollar funds to stablecoin or other digital assets, which can subsequently be withdrawn,” the terms of service said.

Binance explained in the customer email that it changed the FDIC language in “accordance with guidance received” from the FDIC.

“Digital Assets are not legal tender, are not backed by any government, and accounts and value balances are not subject to protections or insurance provided by the FDIC or the Securities Investor Protection Corporation,” states the terms of service.

Binance US announced back in late July that it transitioned to a crypto-only exchange. 

“While Binance.US does not support USD services for the time being (until we onboard stable banking partners), you can open an account with a trusted platform that allows you to buy crypto with USD,” the exchange wrote in a post from two weeks ago.

As a result of a lawsuit from the US Securities and Exchange Commission, Binance.US announced on June 13 that it would be pausing customer withdrawals to transition to an all-crypto exchange due to “banking partners [who] have signaled their intent to pause USD fiat channels.”

Read more: Binance hit with class-action lawsuit over alleged market manipulation

Ten days later, Binance US announced that it was restoring USD withdrawals, though it warned that it may discontinue USD withdrawals and announced that it was seeking “additional USD deposit/withdrawal bank partners.”

The FDIC, in recent months, clarified that it does not cover crypto custodians, exchanges, or wallet providers. The agency specifically covers insured banks. 

The agency sent a letter to OKCoin — now OKX — in June, accusing CEO Hong Fang and other executives of making false or misleading statements” about FDIC insurance.

Earlier this month, the Federal Trade Commission and Commodity Futures Trading Commission went after bankrupt lender, Voyager, and its former CEO Stephen Ehrlich. 

The FTC alleged that both Voyager and Ehrlich made deceptive claims around FDIC insurance, claiming that the customers were protected. However, the FTC stated that both Ehrlich and Voyager were “well aware” that Voyager itself was not insured, and therefore customer deposits were not protected.

Binance.US did not immediately respond to a request for comment.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (10).png

Research

Innovations on Aptos’ technical design through Raptr, Shardines, and Zaptos approach near-optimal latency and throughput by unlocking 100% utilization of network resources, with the capacity to settle 260k transactions per second with latencies less than 800ms. The original Move language was revamped with the launch of Move 2, supporting more expressivity in smart contract logic and a scalable ability to interact with high volume datasets. The ecosystem has benefitted from strong asset inflows, now hosting over $1.3B in stablecoins, $450M in bridged BTC, and $530M in RWAs. Activity in the Aptos ecosystem has grown notably over the past year, with monthly application revenue reaching ~$835k and monthly DEX volumes growing to over $5B, both at new all time highs.

article-image

Interchain Labs will focus on sovereign L1s and institutional demand, abandoning plans for smart contracts on the Cosmos Hub

article-image

Also, only three tokens have outperformed bitcoin so far this year: XMR, HYPE and SKY

article-image

The fund group has submitted proposals in recent months for other funds that would hold litecoin, solana, XRP, HBAR, Sui and others

article-image

Momentum’s back — BTC leads, risk assets follow

article-image

Ondo Finance’s acquisition of blockchain development company Strangelove follows its buy of Oasis Pro

article-image

Cryptocurrency and stock traders alike had a lot to unpack Wednesday