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The agreement discloses that BAM is not an FDIC-member institution, and that both fiat wallet balances and digital assets held on the platform are not covered by FDIC deposit insurance or SIPC investor protection. The terms also state that digital assets may lose value and are not legal tender.
This analysis describes what Binance.US's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This provision discloses that user funds and digital assets held on the Binance.US platform carry no federal deposit or investor protection insurance, meaning that in the event of BAM's insolvency or operational failure, users would not have access to FDIC or SIPC recovery mechanisms. The terms separately state that fiat funds are held in Treasury bills, cash sweep programs, or insured depository accounts, but the accounts themselves are not FDIC-insured at the BAM level.
The updated terms introduce automatic enrollment in Soft-Staking for eligible tokens held in user accounts, meaning assets will be staked on Binance.US's behalf with third-party providers unless users opt out before the policy takes effect. Previously, the terms stated staking was optional and required explicit designation. The revised language also establishes that starting July 1, 2026, users will receive at least 14 days' notice before material changes to fee schedules, terms, or account policies take effect. Users can avoid automatic staking by opting out before July 1, 2026, or by withdrawing or designating specific tokens as ineligible for Soft-Staking.
View change record →Under this clause, fiat balances held in BAM Fiat Wallets and all digital assets in user accounts are not covered by FDIC insurance or SIPC protection. The agreement separately discloses that fiat funds are held in instruments that may include FDIC-insured depository accounts, but this pass-through coverage, if applicable, would depend on circumstances not fully specified in the terms.
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"BAM is not a bank nor a member of the FDIC. Your BAM Fiat Wallet and Digital Assets are not insured by the FDIC. Your Digital Assets may lose value. ... 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 ("SIPC").Excerpt from Binance.US's Terms of Use
1. REGULATORY LANDSCAPE: The FDIC non-coverage disclosure engages FDIC guidance on the appropriate disclosure of deposit insurance status for non-bank entities that hold customer funds. The SIPC non-coverage disclosure is relevant to the financial asset election under California UCC Division 8 discussed elsewhere in the terms. CFPB and FTC oversight of consumer financial product disclosures may apply to the adequacy of these non-coverage statements. 2. GOVERNANCE EXPOSURE: Medium. The disclosure is explicit and prominently stated in the terms, but the treatment of fiat funds in instruments including demand deposit accounts at insured depository institutions creates a potential for user confusion about pass-through FDIC coverage eligibility, which the terms do not address. 3. JURISDICTION FLAGS: State money transmission statutes in California, New York, and other states impose requirements on how non-bank financial service providers hold and protect customer funds. The adequacy of disclosure and the specific instruments used to hold fiat funds should be assessed against applicable state requirements. 4. CONTRACT AND VENDOR IMPLICATIONS: The terms state that fiat funds are held separately from BAM corporate funds and will not be used for operating expenses or made available to creditors in bankruptcy. This is a material disclosure for institutional users assessing counterparty risk. 5. COMPLIANCE CONSIDERATIONS: Legal teams should assess whether the fiat fund holding structure qualifies for pass-through FDIC coverage and, if so, whether this is adequately disclosed to users. The SIPC non-coverage disclosure should be evaluated in conjunction with the UCC Division 8 financial asset election for consistency and completeness.
This provision discloses that user funds and digital assets held on the Binance.US platform carry no federal deposit or investor protection insurance, meaning that in the event of BAM's insolvency or operational failure, users would not have access to FDIC or SIPC recovery mechanisms. The terms separately state that fiat funds are held in Treasury bills, cash sweep programs, or …
Under this clause, fiat balances held in BAM Fiat Wallets and all digital assets in user accounts are not covered by FDIC insurance or SIPC protection. The agreement separately discloses that fiat funds are held in instruments that may include FDIC-insured depository accounts, but this pass-through coverage, if applicable, would depend on circumstances not fully specified in the terms.
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