Global crypto exchange Binance is suspending deposits and withdrawals in U.S. dollars via bank accounts starting Wednesday as more and more banking institutions try to reduce their exposure to the crypto market. “We are working hard to restart service as soon as possible,” Binance said.
Binance Suspending USD Deposits and Withdrawals
Global cryptocurrency exchange Binance is reportedly suspending withdrawals and deposits in U.S. dollars using bank accounts starting Wednesday. Without providing a reason, a spokesperson for Binance told CNBC:
We are temporarily suspending USD bank transfers as of February 8th. Affected customers are being notified directly … We are working hard to restart service as soon as possible.
“0.01% of our monthly active users leverage USD bank transfers,” the spokesperson continued, noting that bank transfers using other fiat currencies and other methods of buying and selling cryptocurrencies on Binance, such as using credit cards, Google Pay, and Apple Pay, “remain unaffected.”
Nonetheless, the spokesperson claimed: “We’re still overwhelmingly net-positive on net deposits … Outflows always tick up when prices start to level off following a bullish market swing like we saw last week as some users take profits.”
Meanwhile, Binance US, a unit of Binance that is regulated by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) clarified on Twitter that it is a separate entity from Binance and its customers are not affected by the suspension.
Banks Reducing Exposure to Crypto Market
A growing number of banks have been reducing their exposure to the crypto market following the collapse of crypto exchange FTX.
Binance said last month that its banking partner Signature Bank will only process transactions exceeding $100,000 from the beginning of this month. The bank previously stated that it plans to reduce up to $10 billion in deposits from cryptocurrency clients.
The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) recently issued a joint statement warning banking organizations about crypto risks. “The agencies have significant safety and soundness concerns with business models that are concentrated in crypto-asset-related activities or have concentrated exposures to the crypto-asset sector,” the joint statement reads.
What do you think about Binance halting withdrawals and deposits in U.S. dollars via bank accounts? Let us know in the comments section below.
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.
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