Crypto exchange Binance will suspend U.S. dollar transfers

Binance, the world’s largest cryptocurrency exchange, will suspend U.S. dollar deposits and withdrawals, the company said Monday, without providing a reason for the decision.

“We are temporarily suspending USD bank transfers as of February 8th,” a Binance spokesperson told CNBC. “Affected customers are being notified directly.” The company said “0.01% of our monthly active users leverage USD bank transfers” and added that “we are working hard to restart service as soon as possible.”

Binance US, a unit of the company that’s regulated by the Treasury Department’s Financial Crimes Enforcement Network, said in a tweet that it’s not affected by the suspension. Thus the move applies only to non-U.S. customers who transfer money to or from bank accounts in dollars.

Data from Arkham Intelligence shows that following the announcement, there was a sharp spike in outflows from Binance’s crypto wallets, as millions of dollar-pegged stablecoins such as tether and USDC flowed to rival exchanges or individual wallets.

Binance’s net U.S. dollar outflow was over $172 million for the day, based on data from DefiLlama. That represents a tiny amount of money for a company that has $42.2 billion worth of crypto assets, according to Arkham.

“We’re still overwhelmingly net-positive on net deposits,” the spokesperson said. “Outflows always tick up when prices start to level off following a bullish market swing like we saw last week as some users take profits.” Bitcoin rose more than 38% in January, its best month since October 2021.

Binance’s exchange token, BNB, was largely unaffected by the news, holding steady at around $328.

In late January, Binance said U.S. banking partner Signature Bank had increased U.S. dollar transaction minimums to $100,000. At the time, Binance said Signature had told the exchange that the new minimum applied to all crypto exchange customers.

Regarding Monday’s suspension, a Binance representative told CNBC in an email that “Binance.US has its own banking partners and does not have any issues.” The main Binance exchange does not serve U.S. users.

Binance said customers can still use other fiat currencies or payment methods to purchase crypto. For the small number affected, “we’ll have a new partner to announce for those users in the next couple weeks,” the spokesperson said.

Source: cnbc.com