- Binance crypto exchange has resumed USDC withdrawal requests after temporarily pausing them for eight hours.
- The exchange announced that it was working on a token swap to increase its USDC reserves.
- The cryptocurrency exchange CEO Changpeng Zhao has tweeted that the firm is seeing an increase In withdrawals of USDC.
Binance, the world’s largest crypto exchange platform, has resumed processing withdrawal of USD Coin (USDC) stablecoin after pausing them for eight hours on Tuesday. The largest crypto exchange in the world temporarily stopped processing USDC withdrawals due to inadequate USDC reserves in the company, according to the Binance CEO, Changpeng Zhao.
The token swap entails changing one cryptocurrency for another without the need for fiat currency. However, the Binance CEO, CZ, has noted via Twitter that:
“On USDC, we have seen an increase in withdrawals. However, the channel to swap from PAX/BUSD to USDC requires going through a bank in New York in USD.”
CZ further noted that the platform would try to establish more fluid swap channels. “Things seem to have stabilized. Yesterday was not the highest withdrawal we processed, not even the top five,” the Binance CEO tweeted.
According to blockchain data analysis firm Nansen, Binance’s most stablecoin holdings were more than $11.5 billion in Paxos issued as BUSD. Over the 24 hours elapsing at 1 a.m. on Wednesday, the exchange company saw about $3 billion in total outflows, the largest user withdrawal event ever since June.
According to Nansen data, the assets recognized in Binance-controlled wallets amount to almost $60 billion, of which $36 billion is held in BNB and BUSD tokens, the platform’s native and stablecoin, respectively. In recent months, Binance worked to remove the use of USDC on its platform in exchange for its stablecoin, BUSD. This indicates that USDC deposits on its platform must be converted to BUSD to meet withdrawal requests.
The crypto exchange’s native token, BNB, offers free discounts like FTX’s collapsed FTT token.
Its users use USDC to trade in and out of different cryptocurrencies without moving money back into U.S. dollars. If all customers withdraw USDC from the exchange firm, it could be moved to another platform.
“Reuters has it wrong again,” Binance’s’ spokesperson
However, investors have called for more transparency from the crypto platform’s business. Binance has been in the spotlight since it decided to sell its stake in FTX’s self-issued FTT tokens, which preceded the collapse of the rival crypto exchange.
Last month, the platform issued a proof of reserve, alleging a reserve ratio of 101%, meaning it has sufficient assets to cover customer deposits. Nonetheless, an auditing firm, Mazars, Binance used for its proof of reserves a week ago, stipulated that the exchange firm does not express an opinion or an assurance conclusion.”
According to a Reuters report, the U.S. Justice Department is weighing whether to press charges after a multi-year investigation against Binance for violating sanctions and anti-money laundering laws. Noteworthy, the exchange responded to the Reuters report via tweet, noting, “We don’t have any insight into the inner workings of the U.S. Justice Department, nor it would be appropriate for us to comment if we did.”
