Binance, world’s largest cryptocurrency exchange by trading volume, has announced temporarily halting its U.S dollar bank transfers starting tomorrow, Wednesday, February 8, 2023.
Binance, though, has not provided reasons for the break it intends embarking on.
“We are temporarily suspending USD bank transfers as of February 8th. Affected customers are being notified directly. 0.01% of our monthly active users’ leverage USD bank transfers. We are working hard to restart service as soon as possible.”
Binance
Binance U.S, indicating it’s exclusion in the suspension, mentioned that this move applies only to non-U.S customers, who transfer funds from or to bank accounts in dollars.
Moreover, Binance said customers can still use other fiat currencies apart from the dollar or payment methods to purchase crypto despite its uncertainty as to whether the suspension is geographically distinct or whether it is from the banks partnered with Binance.
“While some banks have been withdrawing support for crypto, other banks are moving in. Some setbacks were expected from last year’s incidents.”
Changpeng Zhao, Binance Chief Executive Officer
Zhao passed this comments while making reference to the downfall of FTX (another crypto trading company), whose founder, Sam Bankman-Fried now is confronted with a number of charges for fraud, money laundering and trust law violations.
It can be deduced from Zhao’s comments that Binance’s suspension will be short-lived and should not have any negative implications on the crypto activities of its users.
Binance has promised to deliver more updates on the suspension as well as provide an estimated time of resumption for making USD transfers on the exchange.
Data from Arkham Intelligence, block chain analytics startup, reveals that subsequent to Binance’s recent announcement, Binance’s crypto wallets experienced a sharp spike in outflows, as millions of dollar-pegged stable coins such as tether and USDC flowed to rival exchanges or individual wallets.
According to Arkham, inferring from data from DefiLlama, Binance’s net U.S. dollar outflow was over $172 million for the day, representing just a tiny amount of money for a company that has $42.2 billion worth of crypto assets.
“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.”
Arkham
Bitcoin rose more than 38%, in January, 2023 –the best month since October 2021. Binance’s exchange token, BNB, was largely unaffected by the news, remaining steady at around $328.
Towards January ending, Binance announced that its U.S. banking partner, Signature Bank, raised the minimum amount for U.S. dollar transactions to $100,000.
In addition, Binance stated that Signature informed them that this minimum amount applied to all crypto exchange clients.
“Binance.US has its own banking partners and does not have any issues. For the small numbers affected, we’ll have a new partner to announce for those users in the next couple weeks.”
Anonymous Representative of Binance
This, a Binance representative told CNBC in relation to the announced dollar bank transfers suspension.
Overview of Binance
Binance is one of the major key players and exchanges for cryptocurrencies in the world, where traders easily make crypto conversations with minimum charged fees.
Binance facilitates approximately $38 billion transactions with every given day and holds over 350 assets across its platform.
Recently, Binance came out the ‘Emerging Technology of The Year’ at Ghana’s Fintech Awards 2022.
The award highlighted Binance’s expertise in leveraging technology to deliver financial services and enable payments and transactions.
“At Binance, we believe that financial services should be accessible to everyone, regardless of their background or location.
“Despite the major challenges that the digital asset industry faced in 2022, Binance has remained focused on building products that add real value and prioritize user experience and security – two key aspects of the company’s ethos.”
Emmanuel Ebanehita, Binance West Africa Marketing Lead
The well acclaimed cryptocurrency exchange aims at making cryptocurrency accessible to all by offering extensive financial services and the most innovative product suite across a growing network while also retaining the lowest fees in the industry.
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