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Binance Temporarily Stops USDC Withdrawals As Investor Concerns Over Reserves Mount

Cryptocurrency exchange Binance announced on Tuesday that it is temporarily halting withdrawals of the stablecoin USDC (CRYPTO: USDC) while it conducts a "token swap."

The decision was made as investors worry about Binance's stability in the wake of the collapse of competitor exchange FTX (CRYPTO: FTT) and charges being filed against its former CEO Sam Bankman-Fried by the U.S. authorities.

Withdrawals of USDC have been "temporarily paused," according to Binance, while it conducts a "token swap."

Binance CEO Changpeng Zhao tweeted on Tuesday that withdrawals of USDC are increasing on the exchange.

Investors can trade in and out of various cryptocurrencies using USDC without having to convert their funds back into U.S. Dollars.

It is possible that traders are taking their USDC out of Binance in order to transfer it to another exchange.

Also read: Canadian Regulator Gets Strict With Crypto Trading Platforms Following FTX Collapse

According to Zhao, transfers from the stablecoin PAX (CRYPTO: USDP) and Binance's own BUSD (CRYPTO: BUSD) into USDC must go through a New York-based bank that is not yet operational.

According to Zhao, users who want to withdraw money from Binance are looking to convert their PAX and BUSD into USDC.

Users can still withdraw other stablecoins like BUSD and Tether (CRYPTO: USDT), according to Zhao.

He added that deposits are unaffected.

The native cryptocurrency of Binance, BNB (CRYPTO: BNB), fell roughly 5% lower early Tuesday before rebounding to trade flat.

Meanwhile, blockchain data company Nansen on Tuesday disclosed that Binance saw withdrawals totaling $1.9 billion during the previous 24 hours.

Nansen stated this is the biggest daily outflow since at least June.

"Binance's withdrawals are increasing due to the growing uncertainty about its reserves report," a Nansen spokesperson stated.

According to blockchain tracker Whale Alert, about 500 million USDT have been transferred to Tether Treasury from Binance.

Next: FTX Founder Sam Bankman-Fried Charged By SEC For Defrauding Investors

Photo: Courtesy of Shutterstock.

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