On June 14, BAM Trading Services announced that it was partnering with Binance, the world’s largest cryptocurrency exchange, to bring Binance to the US with full regulatory compliance. Binance will compete with Coinbase in the US. Binance is trying to be compliant with local regulations and has opened up local exchanges in Singapore, the United Kingdom, and Uganda.
There’s a catch, though. The company updated its terms of service on June 12, effectively barring US-based users from using services on Binance.com, the company’s global portal. The US accounts for 25%–30% of the site’s traffic. Binance.com lets users trade in over 150 pairs of cryptocurrencies. Because Binance.US will probably only allow users to trade a much smaller set of cryptocurrencies, smaller cryptocurrencies are expected to be out of luck. In simple terms, Americans, who account for one-quarter of Binance’s global customers, may not be able to trade in all cryptocurrencies.
Flight to (relative) safety?
If US traders aren’t allowed to trade in other cryptocurrencies (known as altcoins), they may shift to major cryptocurrencies such as Bitcoin. Alex Kruger, a crypto economist, said in a tweet that the news would lead people to sell everything else and buy currencies such as Bitcoin. The Binance news, along with the news that Facebook will launch its cryptocurrency tomorrow, led to a surge in Bitcoin’s price. Between June 14 and June 16, Bitcoin jumped $850. Facebook’s (FB) debut is expected to make cryptocurrencies mainstream. However, Facebook’s coin is expected to be more stable than Bitcoin.