Binance CEO Changpeng Zhao

Binance suspends USD transfers, indicates issues with banks

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Binance, the world’s largest cryptocurrency exchange, will suspend all deposits and withdrawals of U.S. dollars at its international exchanges from Feb. 8, the company said in a Twitter post on Monday in the U.S. without giving a reason. Binance chief executive Changpeng Zhao indicated in a separate Twitter post it was caused by “some banks withdrawing support for crypto.”

See related article: Binance’s BUSD-peg stablecoin has not always been fully collateralized: report

Fast facts

  • “While some banks [are] withdrawing support for crypto, other banks are moving in. Some setbacks were expected from last year’s incidents,” Zhao tweeted early morning Tuesday in Asia, without defining what the incidents were.
  • Last November, Binance’s rival exchange FTX collapsed, with the founder Sam Bankman-Fried now facing multiple charges of fraud and money laundering. The failure had repercussions throughout the industry, with companies such as Genesis Global Capital and BlockFi filing for bankruptcy, and undermining trust.
  • Last month, The U.S. Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) issued a joint statement to warn banks of the risks associated with crypto assets.
  • The regulators wrote that issuing or holding crypto assets on a decentralized network is inconsistent with safe and sound banking practices, but added that organizations should not be discouraged from providing such services if permitted by law.
  • Customers at Binance.US are not affected by the suspension, according to a tweet from Binance.US Customer Support
  • Binance itself runs all of its exchanges outside of the U.S. in more than a hundred countries, including Canada, Australia and France, according to its official website.  
  • The Binance CEO added that while U.S. dollar transfers are used by only 0.01% of the platform’s monthly active users, he acknowledged the inconvenience for customers and said the company is working to resolve the issue.
  • Binance said it aims to restart the service as soon as possible, but didn’t provide a date.
  • (Updates to add warnings to banks in bullet points three and four.)

See related article: Binance says it erroneously mixed customer funds with collateral for Binance-issued tokens





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