Binance suspends USDC withdrawals: The largest cryptocurrency exchange in the world, Binance, said that it is halting withdrawals of the stablecoin USDC while it conducts a “token swap.”
The decision was made as investor worries about Binance’s stability increased in the wake of the demise of competitor exchange FTX and news of a probable criminal probe by the US authorities.
As part of a “token swap,” Binance stated in a statement on Tuesday that it has “temporarily stopped” USDC withdrawals. This entails exchanging cryptocurrencies for one another without using fiat money.
The exchange is experiencing a spike in withdrawals of USDC, a cryptocurrency known as a stablecoin since it is pegged one-to-one with the US Dollar, according to Mr. Changpeng Zhao, CEO of Binance, in a tweet on Tuesday.
On USDC, we have seen an increase in withdrawals. However, the channel to swap from PAX/BUSD to USDC requires going through a bank in NY in USD. The banks are not open for another few hours. We expect the situation will be restored when the banks open. 1/2
— CZ ? Binance (@cz_binance) December 13, 2022
Investors can trade in and out of various cryptocurrencies using USDC without having to convert their funds back into US dollars. Trading USDC off of Binance may be done so that they can transfer it to another exchange.
According to Mr. Zhao, transfers from the stablecoin PAX and Binance’s own currency, BUSD, into USDC must go through a New York-based bank that is not yet operational. Users who want to withdraw money from Binance are looking to convert their PAX and BUSD into USDC.
While the banks remain closed, Binance may be able to swiftly acquire additional USDC through a token swap in order to resume customer withdrawals.
While the BUSD has lost 0.04 percent to trade at $0.0996, Binance Coin (BNB) is down 5.3% to $286.
Investors in cryptocurrencies are on edge due to worries about further effects on the business following the collapse of FTX and the arrest of its former CEO, Sam Bankman-Fried.
Since its decision to sell its interest in FTX’s self-issued FTT digital tokens, which came before the demise of the rival exchange, Binance has drawn attention. The claims that US Department of Justice prosecutors are delaying the conclusion of criminal investigation into Binance have caused concern.
