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Binance to Cease US Dollar Transfers for Non-US Customers

Published 02/07/2023, 08:00 AM
Updated 02/07/2023, 09:30 AM
© Reuters.  Binance to Cease US Dollar Transfers for Non-US Customers
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  • Binance has announced a temporary suspension of USD bank transfers starting February 8.
  • According to Binance, users can choose from other deposit methods.
  • Binance’s suspension applies only to non-US users.
  • Stablecoin outflows from the crypto exchange spiked following the announcement.

Cryptocurrency exchange Binance has announced it will temporarily suspend US Dollar bank transfers starting from February 8, 2023.

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A representative from Binance revealed to Bloomberg that users could explore other deposit methods. According to the spokesperson, some of these methods include bank transfer of other fiat, direct deposit of cryptocurrency, credit card, debit card, Google (NASDAQ:GOOGL) Pay, Apple (NASDAQ:AAPL) Pay, and its P2P marketplace.

The suspension is only applicable to non-U.S. users of Binance who transfer money between bank accounts to the crypto exchange in U.S. dollars. The U.S organ of Binance has separate banking partners from the international body of the cryptocurrency exchange, the Binance spokesperson told CNBC.

Binance revealed that a small percentage of cryptocurrency exchange users would be affected due to the recent development. The spokesperson, whose name is withheld, stated that only 0.01% of Binance Monthly active users use the USD bank transfers feature. As revealed, the cryptocurrency exchange is working to reinstate the feature soon.

The announcement coincided with a surge in stablecoin outflows from the cryptocurrency exchange.

Insights into the Rise in Stablecoin Outflows from Binance

According to reports, stablecoins such as USDT and USDC moved rapidly out of Binance to other rival crypto exchanges and self-custodial wallets following the update. Within a short period after the announcement, $172 million worth of stablecoins had exited the crypto exchange.

In reaction to the sizable outflow, the spokesperson divulged that the recent bull run in the crypto market caused it.

“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,” the spokesperson stated. The figure represents a small amount of the crypto assets in Binance’s custody. According to its proof of reserves published last November, Binance held $69 billion in crypto assets.

Nevertheless, since the collapse of FTX, Binance appears to reinforce its position as an industry leader. On February 6, the crypto exchange initiated a tax-calculating feature to aid its users in effectively summing their expected tax on their crypto holdings.

On the Flipside

  • Many crypto traders have moved their assets out of centralized exchanges to minimize the risk posed by them after the FTX collapse. Binance’s stablecoin reserve fell drastically from $26.38 billion on Nov. 7 to $20.11 billion on February 6, according to CryptoQuant.

Why You Should Care

US regulators warned banks against working with cryptocurrency companies after FTX’s collapse. Binance announced last month that its U.S. banking partner, Signature Bank (NASDAQ:SBNY), would not handle user transactions under $100,000, minimizing its vulnerability to digital assets. The US authorities’ warnings might have contributed to the suspension of USD transfers.

You may also like:

Binance Launches Free Tax Tool to Give Investors Insight Ahead of Tax Season

Binance Cuts Ties with WazirX, Cancels Its Wallet Service

See original on DailyCoin

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