Binance , the world ’s largest crypto exchange , announced it ’s hesitate withdrawals of the USDC stablecoin following a spike in drug user activity that resulted in $ 1.9 billion in coitus interruptus in the last day . That spindle , according to CoinDesk , comes amid possible red flags revealed in its recentproof - of - reserve paper .
But Binance announcedon Twitterearly this break of day that the exchange is merely deal a token swap with the USDC stablecoin , hence the determination to pause user withdrawals . A nominal trade , per ByBit , “ involves the exchange of token types between two parties , from one blockchain to another . ” The USDC is called a stablecoin since it ’s value is 1 to 1 with the U.S. dollar bill .
Binance CEO Changpeng Zhao elaborated in a tweet that asBinance saw heightened user withdrawalsof USDC on Sunday and in the other hours of Monday sunup , the exchange made the conclusion to hesitate withdrawals as the savings bank that could honor them were unopen . Reuters , citing data business firm Nansen , account that these withdrawals of USDC total $ 1.9 billion . Zhao also encouraged users to withdraw other unchanging coins , like BUSD .
“We expect the situation will be restored when the banks open,” Zhao explained on Twitter this morning.Image: Michael M. Santiago (Getty Images)
On USDC , we have seen an increment in withdrawal . However , the distribution channel to swap from PAX / BUSD to USDC need going through a camber in NY in USD . The banks are not open for another few hour . We expect the situation will be restore when the banks afford . 1/2
— CZ 🔶 BNB ( @cz_binance)December 13 , 2022
“ These are 1:1 conversions , no perimeter or purchase involve . We will also attempt to prove more fluid barter channels in the future . In the interim , feel free to withdraw any other unchanging coin , BUSD , USDT , etc , ” Zhao added in a follow - up .
While an telephone exchange pausing coitus interruptus is not inherently a bad thing , exchanges that have made that conclusion in the past have not fared well . Crypto exchange Celsius intermit withdrawal for its 1.7 million users this past June , beforefiling for bankruptcythe adopt calendar month . Binance , on the other paw , paused withdrawalsaround the same time as Celsius , but only temporarily as the value of Bitcoin descend while claim in a tweet that the pause was “ due to a stuck dealing causing a backlog . ”
Binance ’s current withdrawal pause comes as investors are already skittish as fellow cryptocurrency exchangeFTX face on-going radioactive dust .
Changpeng ZhaoCryptocurrenciesStablecoin
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