Binance, the world’s largest cryptocurrency exchange, said customers will no longer be able to deposit and withdraw directly using U.S. dollars via bank transfers starting Feb. 8, citing a growing number of banking institutions trying to reduce exposure to the cryptocurrency market. exposure.
This does not apply to other deposit and withdrawal methods such as credit cards, Google Pay and Apple Pay. In addition, bank transfers using other fiat currencies such as the euro, as well as customers of Binance US will not be affected. In a statement, a Binance spokesperson said
It’s worth noting that only 0.01% of our monthly active users use USD bank transfers, but we’ll be restarting service as soon as possible.
A Binance spokesperson did not specify which bank partner caused the suspension, nor did it say when U.S. dollar bank transfers would resume.
However, Binance said last month that because one of the exchange’s partner banks, Signature Bank, adjusted the minimum transaction limit for cryptocurrencies, some Binance users with a transaction amount of less than $100,000 will not be able to buy and sell cryptocurrencies through SWIFT transfers. . Binance also revealed at the time that “Only 0.01% of our average monthly users are served by Signature Bank.”
After the collapse of now-defunct cryptocurrency exchange FTX last year, U.S. federal regulators warned banks about the risks of doing business with cryptocurrency firms.
Responding to the announcement, Binance CEO Changpeng Zhao said that while some banks “are withdrawing their support for cryptocurrencies, others are getting involved at the same time” and “expect last year’s events to cause some setbacks.”
Data from Arkham Intelligence shows that after the announcement, Binance’s outflows surged in an instant, and it is estimated that as many as millions of dollars in stablecoins flowed to other cryptocurrency exchanges or personal wallets. However, Arkham also pointed out that for companies with a premium of $42.2 billion in encrypted assets, this is just a drop in the bucket.
According to data from DefiLlama, Binance’s net dollar outflow on the day exceeded 172 million US dollars.
