Black_background_logo_BitcoinWorld-removebg-preview
Latest News

Binance Banking Problems Highlight a Divide Between Crypto Firms and Banks

The largest cryptocurrency exchange in the world by trading volume, Binance, will temporarily stop processing bank transfers in US dollars. No other trading strategies will be impacted, according to a tweet from the exchange on February 6. There was no justification for the announcement. Although only 0.01% of the exchange’s total customers will be impacted by the suspension, Changpeng Zhao, the exchange’s CEO, assured users in a tweet that they are working quickly to find a solution.

In the United States, Binance recently ran into related financial problems. As of Feb. 1, Signature Bank, its SWIFT transfer partner, will only allow trades from customers with U.S. dollar bank accounts exceeding $100,000, the company stated on Jan. 21. The bank has already said that it would severely limit deposits from users of cryptocurrencies.

At the time, Binance said it was seeking for a new SWIFT partner and that it would still accept all SWIFT transactions involving other currencies as well as transactions in US dollars made using credit or debit cards.

The most recent step by Signature Bank follows its disclosure in December of plans to liquidate up to $10 billion in crypto deposits in an effort to lessen its exposure to the volatile market changes.We are not a cryptocurrency bank. We don’t want to be obligated to any particular sector or client,” Joe DePaolo, the bank’s CEO, said at the time.

 

A Binance spokesperson told Cointelegraph, “We are pausing USD bank transfers as we upgrade our services. We have contacted affected users directly and regret any inconvenience this causes,” adding:We are actively working to find an alternative solution for SWIFT bank transfers. We have since paused all USD bank transfers as we work to upgrade the service. 0.01% of our average monthly users use U.S. bank transfers.”

According to Nansen data provided to Cointelegraph, prominent stablecoin moves include those of the cryptocurrency trading organization Jump, which withdrew $160 million in stablecoins, and Oapital, a company that invests in digital assets, which withdrew $230 million.

According to Nansen’s Andrew Thurman, head of content,“Jump and Oapital are large players who routinely sling around large sums, however, and it’s difficult to fully attribute the movements to the banking announcement. I’d say the seven-day outflows might be a little high, but the 24-hour inflows show it’s nowhere close to panic.”

 

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.