Binance, the largest cryptocurrency exchange globally by trading volumes, has announced it will suspend US dollar deposits and withdrawals. However, the company has not provided a reason for suspending these services but has affirmed that it will be working to resolve the issue as soon as possible.
Binance to suspend USD deposits and withdrawals
Binance issued an alert to its customers saying that US deposits and withdrawals would no longer be supported starting on February 8. The exchange giant only gave its users two days of notice in a tweet, adding that all other services would remain unaffected.
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
The CEO of Binance, Changpeng Zhao, has also confirmed this development on Twitter saying that a significant portion of its clients were exposed to the changes.
“It is worth noting that USD bank transfers are leveraged by only 0.01% of our monthly active users. However, we appreciate that this is still a bad user experience,” Zhao tweeted.
The restriction will only apply to the users of Binance International, with the Binance US Twitter account saying that its users would not be affected by the changes. The exchange has also said that the affected users are being notified directly so that they can take the necessary steps before the restriction comes into effect.
https://t.co/gM6e3xb9BX is not affected by this suspension. Unless you see an official message from https://t.co/gM6e3xb9BX, our customers will not be affected.
— Binance.US Customer Support (@BinanceUShelp) February 6, 2023
A report by CNBC noted that the news of USD suspension on Binance has triggered an influx of withdrawals from the exchange. The report noted that millions of dollars worth of USDT and USDC stablecoins were taken out of the exchange and transferred to other exchanges or external wallets.
However, the report noted that the withdrawals seen at Binance since the news were a “tiny amount of money” given that the exchange has $42.2 billion worth of crypto assets. A spokesperson from the exchange also noted that Binance was still net-positive on the deposits. The spokesperson added that withdrawals typically spike after a bull run as traders start taking profits.
BNB, the native token for the Binance exchange, has remained largely unaffected by this development. The token has gained by 1.4% in the last 24 hours, and it was trading at around $330 at the time of writing, according to CoinGecko. BNB is also up by 7.7% in the last seven days.
Binance issues with its banking partner
The suspension of USD deposits and withdrawals on Binance comes as the exchange reports banking challenges in the United States. On January 21, Binance’s SWIFT transfer partner, Signature Bank, said it would only process trades made by users with USD bank accounts of more than $100,000 starting from February 1.
Signature Bank said that it was reducing the deposits made by crypto clients. Binance has also said it is looking for a new SWIFT partner, adding that the exchange would accept USD trades made by credit and debit cards. Earlier this month, Binance released a list of 144 countries where USD SWIFT transfers would no longer be supported.
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