Binance, the world’s largest cryptocurrency exchange, announced Tuesday that it will suspend withdrawals of its USDC stablecoin while conducting a “token swap.”
Changpeng Zhao, his CEO of Binance, tweeted on Tuesday that the exchange has seen a surge in withdrawals from USDC.
The move comes amid growing investor concerns over the stability of his Binance following the collapse of rival exchange FTX and reports of a possible criminal investigation by the US government.
#Binance is conducting a token swap involving $USDC. As a result, $USDC withdrawals are temporarily paused.$USDT & #BUSD withdrawals are available and unaffected. $USDC withdrawals will reopen once the token swap is completed. https://t.co/CxgCGBUJEA
— Binance (@binance) December 13, 2022
Binance CEO Changpeng Zhao tweeted Tuesday that withdrawals from USDC are on the rise.
USDC is used by investors to trade various cryptocurrencies without converting their funds back into US dollars. If a trader withdraws his USDC from Binance, it may move to another platform.
Zhao said all transfers from the stablecoin known as PAX to his USDC and his BUSD, Binance’s own token, must go through a New York-based bank that has not yet opened. said there is Zhao’s proposal is for users to convert his PAX and his BUSD to his USDC to withdraw funds from his Binance.
A token swap could be a quick way for Binance to get more USDC while banks are closed to resume customer withdrawals.
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
Zhao said users can continue to withdraw other stablecoins such as BUSD and Tether. Deposits will not be affected, he said.
Binance’s proprietary token, dubbed BNB was down about 5% as of Tuesday morning, according to data from CoinGecko.
When crypto companies have to suspend payments, it’s usually not good news. Over the summer, crypto firms, including lender Celsius, had to suspend payments before finally filing for bankruptcy. As for Binance, there are no indications of such problems.
Binance has confirmed the outflow of $1.6 billion from its platform in the past 24 hours, according to a tweet published by crypto data firm Nansen on Tuesday.Binance has more than $60 billion in assets on its platform. Nansen says
Investors jittery
The bankruptcy of FTX and the arrest of former CEO Sam Bankman-Fried have alarmed cryptocurrency investors amid fears of further contagion across the industry.
Binance has been in the limelight since it decided to sell its stake in FTX’s self-issued FTT digital token.
Investors demand more transparency in Binance’s business. Last month, the company issued a reserve proof claiming his 101% reserve ratio. That means you have enough assets to cover your customers’ deposits.
But critics say the evidence of the stockpile is not enough to provide a collateral guarantee for Binance. Accounting firm Mazars, which used Binance to certify its reserves, said in its five-page report that the company “does not provide an audit opinion or a vouching conclusion.”
Investors are also eyeing a Reuters report that US Justice Department prosecutors are delaying the completion of a criminal investigation into Binance. Citing four people familiar with the matter, Reuters reported that the investigation was focused on Binance’s compliance with anti-money laundering laws. “Reuters is wrong again.”
“We have no insight into the inner workings of the U.S. Department of Justice and it is not appropriate to comment,” the company said in a tweet Monday. rice field.
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