Binance has announced that it is temporarily suspending US dollar withdrawals and deposits for international customers from February 8th.
In a Monday tweet, the world’s largest crypto exchange said they would be “temporarily suspending all USD bank transfers” starting Wednesday. Other transfer methods will not be affected, the exchange added, noting that it only affects a “small proportion” of their users.
The exchange did not provide additional details, but said that they are “working hard to resume service as soon as possible.”
in a separate doBinance US, a unit of the company regulated by the Treasury Department’s Financial Crimes Enforcement Network, said it was not affected by the suspension. Thus the move only applies to non-US customers transferring funds in dollars or from bank accounts.
The move comes as Binance is facing banking challenges in the United States. Signature Bank, the banking partner of the exchange last month raised transaction minimums for dollar transfers, announcing that it would only process trades by users with USD bank accounts in excess of $100,000.
At the time, Binance said it was “actively looking” for a new partner to process its SWIFT payments. “Only 0.01% of our average monthly users are served by Signature Bank,” the exchange said in an email sent to affected users.
Signature Bank, which is headquartered in New York, said back in December that it intended to reduce its exposure to customers operating in the crypto space, which has about $10 billion in deposits.
Signature Bank and Silvergate are two of the largest crypto banks. However, both were hit hard by the crypto meltdown last year, which wiped out nearly $2 trillion in value from the crypto market.
both banks have Received Billions in loans from the Federal Home Loan Banks, a system originally designed to support housing finance and community investment, followed the collapse of cryptocurrency exchange FTX.
Signature Bank has about $10 billion in loans through the last quarter of 2022 from its local home-lending bank, while Silvergate has at least $3.6 billion in loans. Signature’s loans are more than double their previous highest amount in several years, while 2022 marks the first year for Silvergate to tap home-lending banks.
As mentioned, Silvergate faced a bank run After the collapse of FTX. In addition to taking on loans, the crypto bank also had to sell $5.2 billion worth of debt securities that were in significant losses on its balance sheet to cover about $8.1 billion in user withdrawals. As a result, it incurred a loss of $718 million, which reportedly exceeds the bank’s total profits since 2013.
Bitcoin Crypto Related Post