Binance Announces Temporary Suspension of USD Bank Transfers
February 7, 2023
The suspension is only expected to affect a small percentage of Binance’s user base.
Binance – the world’s largest crypto exchange – announced on Monday that it will pause all deposits and withdrawals in USD from bank accounts starting February 8.
The company said it will work to restart the feature as soon as possible.
Why the Suspension?
Binance did not specifically explain why the suspension was occurring after announcing it on Twitter. It made it clear, though, that the pause would only have a minor impact on its user base.
All other methods of purchasing and selling cryptocurrency on the exchange will continue to work, including bank transfers using other fiat currencies, like euros, credit cards, Apple Pay, and Google Pay.
“It’s worth noting that only 0.01% of our monthly active users leverage USD bank transfers, but that we are working hard to restart service as soon as possible,” a Binance spokesperson told Bloomberg in an email.
The plans also do not affect Binance.US clients – the sole firm between the two with permission to serve users within the United States. “We are NOT suspending $USD withdrawals & deposits on February 8,” tweeted the company on Monday.”
The collapse of FTX, once Binance’s largest international rival, has made banks hesitant to form partnerships with crypto firms, after federal regulators issued warnings against such partnerships.
“While some banks [are] withdrawing support for crypto, other banks are moving in, tweeted Binance CEO Changpeng Zhao regarding the announcement. “Some setbacks were expected from last year’s incidents.”
CZ added that the pause on USD bank transfers is still a “bad user experience,” despite its minimal impact on customers.
In January, Binance announced that one of its banking partners, Signature Bank, would stop processing fiat to crypto transactions worth less than $100,000. The lender intends to decrease its exposure to crypto markets, cutting off as much as $10 billion in deposits from crypto clients.
The move was in response to a statement from the Federal Deposit Insurance Corporation that crypto-sector banking should be considered a high-risk activity.