Binance Suspends Deposits and Withdrawals

Binance Suspends Deposits and Withdrawals

Binance Holdings Ltd. is the most massive cryptocurrency exchange in the world. It announced a temporary halt to dollar deposits and withdrawals using bank accounts. However, it plans on restoring it soon.

According to a representative, the deposit and withdrawal suspension will begin on Wednesday. Binance did not comment on the reason. In the meantime, the spokesperson said other fiat currencies, like the euro, are “free to go.”

It’s important to note that Binance is trying to restore service as soon as possible, according to an email statement. At the same time, only 0.01% of monthly active users use USD bank transfers. Binance’s other ways of purchasing and selling cryptocurrencies, such as credit cards, Google Pay, and Apple Pay, are still available.

Ever since the FTX blow-up, finding banking partners to enable money to be sent for the acquisition and sale of digital assets has been an issue for crypto businesses. Federal authorities have urged banks to be wary of doing business with cryptocurrency companies.

Binance Holdings Ltd. said last month that the lender is reducing its exposure to digital-asset markets. Their banking partner – Signature Bank will handle the user transactions. The bank, which is based in New York, announced intentions to reduce as much as $10 billion in crypto holdings in December. Signature Bank’s representative said on Monday that the company is unable to comment on client issues.

What catalyzed the recent slump in crypto industry exposure?

Following the bank’s disclosure that customers pulled about $8.1 billion of digital-asset deposits in the fourth quarter, contagion worries in the digital assets market have reached traditional finance firms such as Signature and Silvergate Capital. Last year, Signature’s stock dropped by 64% to close at $66.65.

The Federal Deposit Insurance Corporation issued a warning on crypto-assets and called for big changes. The FDIC regulates state-owned banks that are not part of the Federal Reserve System. This is a US Fed regulator. Business models that are attracted to crypto-asset-related activities or have concentrated exposures to the crypto-asset sector pose rather significant safety and soundness risks. This is despite the fact that banking organizations are not prohibited or discouraged from providing banking services to customers of any class or type.