Binance’s American entity, Binance US has informed its users that their cryptocurrency holdings on the exchange are no longer protected by FDIC insurance.
Binance US updated their terms of service and sent an email to users with this information based on guidance from the FDIC.
Previously, in 2019, Binance US had stated that user deposits in US dollars were insured up to $250,000 in a now deleted blog post. This was because the USD deposits were kept in custodial accounts at multiple banks, which were FDIC-insured.
Users had insurance coverage for their deposits up to $250,000 in case of any issues. However, now they’ve changed this arrangement.
Binance’s updated terms of service now state that ”your accounts and digital assets are not eligible for FDIC insurance protections.”
Furthermore, the update mentions that users will no longer have the option to take out U.S. dollars from their accounts unless they first change them into stablecoins or another type of cryptocurrency.