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According to blockchain intelligence platform Arkham Intelligence, the announcement was followed by a marked increase in outflows from Binance wallets with millions of USDT and USDC being moved to self-custody and rival exchanges.
Global crypto exchange Binance announced on Monday that it would temporarily suspend US dollar deposits and withdrawals on Wednesday, February 8. The exchange did not give a reason for this.
“We are temporarily suspending USD bank transfers as of February 8th,” stated a company spokesperson to CNBC, adding that affected users would be notified directly. The rep also revealed that 0.01% of Binance’s monthly users leverage US dollar bank transfers. The exchange is reportedly working on resuming the service as soon as possible.
“In the interim, all other methods of buying and selling crypto remain unaffected, including bank transfer using one of the other fiat currencies supported by Binance (including euros), buying and selling crypto via credit card, debit card, Google Pay, and Apple Pay and via our Binance P2P marketplace,” the spokesperson added.
Binance.US, which is under the oversight of the Treasury Department’s Financial Crimes Enforcement Network, stated it is not affected by the temporary halt. As such, the suspension only applies to Binance users outside the United States who make US dollar bank transfers. The main Binance exchange does not serve users within the US.
— Binance.US Customer Support (@BinanceUShelp) February 6, 2023
According to blockchain intelligence platform Arkham Intelligence, the announcement was followed by a marked increase in outflows from Binance wallets with millions of USDT and USDC being moved to self-custody and rival exchanges. DefiLlama data suggests that there was a net US dollar outflow was over $172 million. The exchange’s native BNB token remained largely unaffected.
The company spokesperson stated that the exchange was “overwhelmingly net-positive on net deposits,” adding that “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.”
In January, Binance revealed that Signature Bank, its US banking partner, had increased US dollar transaction minimums to $100,000. The exchange stated that the new minimum was applied to all users. Commenting on the suspension, an exchange representative clarified that Binance.US has its own banking partners and is unaffected by the move. A new partner for those affected by the suspension is set to be announced in the next couple weeks.