Crypto exchange Binance to suspend U.S. dollar deposits and withdrawals

Binance, the world’s largest cryptocurrency exchange, is temporarily suspending U.S. dollar deposits and withdrawals, the company said Monday, without providing a reason for the decision.

“We are temporarily suspending USD bank transfers as of February 8th,” a Binance spokesperson said, noting that “Affected customers are being notified directly.”

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 company also added that “0.01% of our monthly active users leverage USD bank transfers” and added that “we are working hard to restart service as soon as possible.”

“In the interim, all other methods of buying and selling crypto remain unaffected, including bank transfer using one of the other fiat currencies supported by Binance (including euros), buying and selling crypto via credit card, debit card, Google Pay and Apple Pay and via our Binance P2P marketplace,” the spokesperson added.

Meanwhile, Binance’s U.S. division, Binance US, a unit of the company that’s regulated by the Treasury Department’s Financial Crimes Enforcement Network, said in a tweet that it’s not affected by the suspension.

https://t.co/gM6e3xb9BX customers can continue to safely and securely withdraw and deposit USD on our platform.

Learn how to deposit USD: https://t.co/rL0rjVdjT8 pic.twitter.com/WyMPzZGuae

— Binance.US Customer Support (@BinanceUShelp) February 6, 2023

Is Binance the next shoe to drop?

Binance is now the latest in a series of crypto-related companies to freeze withdrawals for customers. Late last year, BlockFi suspended withdrawals as fear of insolvency and liquidity crunch spread across crypto markets. Five days later, crypto lending giant Genesis’ crypto-lending unit announced the suspension of withdrawals and originations in its lending business. The affected unit, known as Genesis Global Capital, serves an institutional client base and had $2.8 billion in total active loans as of the end of the third quarter of 2022.

There has been a sharp spike in outflows from Binance’s crypto wallets in recent months, as millions of stablecoins such as tether and USDC flowed to rival exchanges or individual cold wallets. According to data from DefiLlama, Binance’s net U.S. dollar outflow was over $172 million for the day. The outflow represents a tiny amount of money for the company, which currently has $42.2 billion worth of crypto assets, according to Arkham.

“We’re still overwhelmingly net-positive on net deposits,” the spokesperson said. “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.”

Founded in 2017 by Changpeng Zhao and Yi He, the Cayman Islands-based Binance is the world’s leading blockchain ecosystem and cryptocurrency infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume. It provides a platform for trading various cryptocurrencies. Binance also provides access to exchange digital currency pairs on the market while maintaining security, and liquidity, enabling a safe and efficient deal with anyone, anytime and anywhere.

Binance platform is used by millions worldwide, the Binance platform is dedicated to increasing the freedom of money for users and features an unmatched portfolio of crypto products and offerings, including trading and finance, education, data, and research, social good, investment and incubation, decentralization and infrastructure solutions, and more.