Binance, the largest cryptocurrency exchange in the world, has announced that it will halt U.S. dollar deposits and withdrawals starting in February 2023.
From February 8th, we will temporarily suspend all USD bank transfers.
Only a small proportion of our users will be impacted by this and we are working hard to restart the service as soon as possible.
All other methods of buying and selling crypto remain unaffected.
— Binance (@binance) February 6, 2023
According to Binance CEO Changpeng Zhao, USD bank transfers are leveraged by only 0.01% of the exchange’s monthly active users.
“However, we appreciate that this is still a bad user experience and the team is working on quickly resolving this issue.
“While some banks are withdrawing support for crypto, other banks are moving in. Some setbacks were expected from last year’s incidents. Long term, keep building,” – CEO, Binance
The news may have precipitated outflows from Binance wallets, according to CNBC. Following Binance’s announcement there was a significant increase in funds being withdrawn from Binance’s cryptocurrency wallets with many dollar-pegged stablecoins such as Tether and USDC transferred to other exchanges or personal wallets.
Signature Bank
In late January 2023, Binance announced that Signature Bank, a US-based bank providing crypto services, was stopping transactions of less than $100,000 for crypto exchange customers.
“As a result, some individual users might not be able to use SWIFT bank transfers to purchase or sell digital assets ‘with/for USD for smaller amounts,’ Binance said in a statement. This came few weeks after reports indicated that Silvergate customers had withdrawn over $8 billion of their crypto-linked deposits.
During the last quarter of 2022, approximately two-thirds of the bank’s clients withdrew their deposits from the bank as it became the latest casualty of the crypto winter and was forced to sell assets worth $5.2 billion to cover expenses and maintain liquidity.
The bank’s move also came as three US regulators warned banks that issuing or holding crypto was ‘highly likely to be inconsistent with safe and sound banking practices.’
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