Binance Announces Temporary Halt On USD Deposits And Withdrawals
Binance, the leading cryptocurrency exchange in the world, has announced that it will be temporarily suspending U.S. dollar deposits and withdrawals starting on February 8th. This decision has been met with a mix of surprise and confusion, as the company has not provided an explanation for the move. In a statement to CNBC, a Binance spokesperson stated that “0.01% of our monthly active users leverage USD bank transfers” and added that the company is working to restore service as soon as possible.
However, Binance US, which is regulated by the Financial Crimes Enforcement Network of the Treasury Department, has tweeted that it is not affected by the suspension. This means that the suspension only applies to non-U.S. customers who transfer money to or from bank accounts in dollars.
Binance Outflows Reach $172 Million
Data from Arkham Intelligence shows that following the announcement, there was a significant outflow from Binance’s crypto wallets as millions of dollar-pegged stablecoins like tether and USDC were transferred to rival exchanges or individual wallets. The net U.S. dollar outflow was over $172 million for the day, according to data from DefiLlama. Although this may seem like a large amount, it is just a small fraction of Binance’s crypto assets, which are valued at $42.2 billion.
Despite this, a Binance spokesperson stated that the company is still overwhelmingly net-positive on net deposits and that outflows always increase when prices start to level off following a bullish market swing, as some users take profits. This is evidenced by the recent rise of bitcoin, which rose more than 38% in January, its best month since October 2021.
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
BNB Holds Strong Despite Suspension
Binance’s exchange token, BNB, was largely unaffected by the news, holding steady at around $328. In late January, Binance reported that its U.S. banking partner Signature Bank had increased U.S. dollar transaction minimums to $100,000. At the time, Binance stated that Signature had informed the exchange that the new minimum applied to all crypto exchange customers.
A Binance representative told CNBC in an email that “Binance.US has its own banking partners and does not have any issues.” The main Binance exchange does not serve U.S. users. The company has stated that affected customers can still use other fiat currencies or payment methods to purchase crypto. For the small number of users affected by the suspension, Binance stated that it will have a new partner to announce in the next few weeks.
Working to Restore US Dollar Services for Non-US Customers
Binance’s temporary suspension of U.S. dollar deposits and withdrawals has caused a significant outflow from its crypto wallets, but the company has stated that it is working to restore service as soon as possible. The suspension only applies to non-U.S. customers and does not affect Binance US. Binance’s exchange token, BNB, has remained largely unaffected by the news, and the company has stated that affected customers can still use other fiat currencies or payment methods to purchase crypto.