Cryptocurrency giant, Binance, has temporarily suspended US Dollar Deposits and Withdrawals via Bank Accounts. This was effective February 8.
Though no reason was given for this, a Binance spokesman told CNBC “We are temporarily suspending USD bank transfers as of February 8th.”
“Affected customers are being notified directly.” The company said “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.”
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.
Thus the move applies only to non-U.S. customers who transfer money to or from bank accounts in dollars.
CNBC reported that following the announcement on Monday February 6, there was a sharp spike in outflows from Binance’s crypto wallets, as millions of dollar-pegged stablecoins such as tether and USDC flowed to rival exchanges or individual wallets.
As a result of the FTX crypto exchange collapse, an increasing number of banks have been decreasing their involvement in the cryptocurrency market.
Binance announced that its banking partner, Signature Bank, will only handle transactions exceeding $100,000 starting this month. The bank had previously announced its intention to decrease up to $10 billion in deposits from cryptocurrency clients.
Recently, the Federal Reserve, FDIC, and OCC issued a joint statement cautioning banking institutions about the dangers associated with cryptocurrencies. The statement noted the agencies’ concerns regarding business models focused on cryptocurrency-related activities or having a significant concentration of exposure to the crypto sector.
