Binance, the world’s largest cryptocurrency exchange, has announced that it will temporarily halt deposits and withdrawals in US dollars from February 8th. The reason behind the suspension was not stated in the company’s initial Twitter post, however, CEO Changpeng Zhao later indicated that the move was a result of “some banks withdrawing support for crypto”.
Zhao acknowledged that there have been some setbacks in the crypto industry, citing the recent collapse of rival exchange FTX and subsequent charges of fraud and money laundering against its founder Sam Bankman-Fried, which led to other companies like Genesis Global Capital and BlockFi filing for bankruptcy and damaging the overall trust in the industry.
Last month, the US Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) released a joint statement warning banks about the risks associated with crypto assets, stating that holding such assets on a decentralized network is not consistent with safe banking practices. However, they also noted that organizations should not be discouraged from providing such services if allowed by law.
It is worth noting that the suspension of US dollar transfers will only apply to Binance’s international exchanges and will not affect its customers in the US. Binance operates in over 100 countries, including France, Canada, and Australia.
Binance CEO Changpeng Zhao mentioned that although US dollar transfers only account for a mere 0.01% of the platform’s monthly active users, the company understands the inconvenience it may cause to its customers and is working towards resolving the issue. The company has not provided a specific date for the resumption of services, but stated that its goal is to restart the service as soon as possible.
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