Binance Announces Temporary Pause on U.S. Bank Transfers

The world’s largest crypto exchange, Binance, will halt transfers to and from US bank accounts starting Wednesday, February 8. The company tweeted out Confirmation of suspension of USD bank transaction the following Monday early reports out of several news agencies.

“Starting February 8, we will temporarily suspend all USD bank transfers,” the exchange’s official Twitter account wrote. “Only a small portion of our users will be affected and we are working hard to resume service as soon as possible,” the company added.

Note: Binance is separate from Binance.US — and that exchange’s withdrawals and deposits are reportedly unaffected An entry from Binance.US customer support account. In addition, transfers via other fiat currencies such as e.g It won’t be euros affected by the pause, Binance said Bloomberg.

Gizmodo reached out to Binance for more details on why the exchange is stopping US remittances, but didn’t get an immediate response. Go to CoinDeskthe company noted that just 0.01% of Binance’s monthly users make USD bank transfers and said affected customers would be “immediately notified.”

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However, even the limited activity restrictions suggest that there must be something seriously wrong with Binance’s US banking infrastructure.

The issue could stem from an issue with Binance’s US-based banking partner, Signature Bank, as suggested by Bloomberg. Crypto exchanges like Binance rely on partners to facilitate moving funds back and forth between blockchain wallets and actual bank accounts. And last month, Signature Bank signaled that it would cut back significantly on blockchain deposit acceptance and exposure to crypto assets. According to a previous Bloomberg report, the financial institution announced that it would only process crypto transactions greater than $100,000.

A Tweet from DB News further suggested that Binance’s problem is related to the lack of suitable banking partners. “The suspension is expected to last ‘a few weeks’ pending the establishment of a new banking partner: Confidant,” wrote the crypt0-focused Newswire.

As a result, banks have become increasingly reluctant to do business with blockchain companies the FTX collapseswhere what was once the second largest crypto exchange lost everything—Client funds included– attributed in large part to former CEOs Sam Bankman-Fried’s shady dealings.

Although Binance’s leadership has repeatedly claimed that this is the case nothing like FTX, however, the stock market has encountered its own problems of late. Binance has resisted a full audit of its finances, which could theoretically prove its differences from FTX. The company that has hired Binance to conduct an external review stop before it could finish. Then, in January, the company admitted that its so-called “stablecoin” wasn’t really that stable as it had suggested. The exchange temporarily halted payouts of this coin, USDC, in December 2022 after a spike in activity.

Binance also drew negative attention last month for its role as thoroughfare for alleged money launderingafter US regulators filed charges against Bitzlato, another crypto exchange.

Even if Binance manages to get its US transfer system up and running again soon, the pause underscores the ongoing instability of the cryptosphere, and gives controller and financial institutions even more reason to be cautious. Though the real spring might be coming soon, crypto winter could stay here for another season.