- Binance announced that from today transactions with dollars are temporarily suspended, although this rule is not applicable to BinanceUS as it is an independent entity.
- Binance stated that they have made this decision since only 0.01% of their monthly assets use dollars for their transactions.
On February 6, the main crypto exchange by volume traded, Binance, advertisement the temporary suspension of all bank transfers in US dollars as of February 8. What is happening? Does the measure apply to Binance.US?
The entire cryptocurrency ecosystem has faced a wide variety of changes after the crashes of many crypto companies such as FTX or Celsius. This is because the cryptocurrency market is widely interconnected; if one falls, the chances are that others will fall.
Binance, for its part, it has remained strong in the face of the unstable market context. However, this does not mean that it has not been affected.
Binance suspends dollar bank transfers
The dollars are one of the different methods allowed by Binance for its users to deposit for the purchase of assets and withdraw their profits from the sale of cryptocurrencies, through bank transfers. However, on February 6, the crypto exchange announced on Twitter without further explanation that users will not be able to make transfers in US dollars as of February 8.
The crypto exchange only emphasized in its message that only a small portion of its users used this method to buy and sell cryptocurrencies. In fact, in a separate tweet, Changpeng Zhao, CEO of Binance, better known as CZ, explained:
“It’s worth noting that USD bank transfers are leveraged by only 0.01% of our monthly active users. However, we understand that this is still a bad user experience.”.
Likewise, the crypto exchange assured that the rest of the methods to buy and sell cryptocurrencies would not be affected.
“All other methods of buying and selling cryptocurrency will not be affected, including bank transfer using one of Binance’s other supported fiat currencies (including Euros), as well as buying and selling cryptocurrency using a credit card, debit, Google Pay and Apple Pay and through our Binance P2P marketplacea spokesperson explained according to CoinDesk.
Following the news, many users asked on Twitter if the measure applied equally to Binance.US. Faced with it, Binance.US answered explaining that they are a completely separate entity from Binance and, therefore, said platform will not suspend transactions in US dollars.
What is happening?
Binance did not offer any kind of explanation about the measure it has taken, however, there is a possibility that it is related to Binance’s banking partner Signature Bank’s decision to no longer process crypto SWIFT transactions under $100,000 USD.
At the time, as reported in Bitcoin Mexico, Binance assured that they would seek an “alternative solution” for those users who had been affected by Signature Bank’s decision.
An important piece of information is that, in fact, Signature Bank is currently facing a class action lawsuit in which it alleges that entity “had actual knowledge of and substantially facilitated the now infamous FTX fraud”. Proving that the crypto market is more interconnected than many might think.
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