Binance suspends bank transfers of U.S. dollars
After a stretch that has seen the world’s biggest crypto exchange bleed billions of dollars in assets, Binance announced today that customers would no longer be able to transfer U.S. dollars from bank accounts into the exchange to buy and sell cryptocurrency.
A Binance spokesperson told Fortune that the company was temporarily suspending transfers as of Feb. 8, and would be notifying affected customers directly, adding that the change would affect only 0.01% of the exchange’s monthly active users.
“We are working hard to restart service as soon as possible,” the spokesperson wrote in an emailed statement.
The Binance spokesperson did not specify which banking partners were causing the temporary suspension, and there is no clear timetable for when U.S. dollar bank transfers will resume.
The development is the latest of a series of financial obstacles facing the exchange. In January, Binance announced that one of its banking partners—the U.S.-based Signature, a digital assets-focused bank—would no longer process SWIFT fiat transactions for individuals of less than $100,000 starting at the beginning of February.
With banks serving as an important on-ramp to exchanges for customers looking to buy or sell cryptocurrency, closing off U.S. dollar transfers will further limit users’ ability to interact with Binance.
The spokesperson said that other options would remain available to customers, including buying and selling crypto through other fiat currencies supported by Binance, as well as via credit cards, debit cards, Google Pay, and Apple Pay.
Traditional banks remain a crucial part of the crypto ecosystem, with companies requiring financial partners for everything from payroll payments to processing inbound customer transactions with fiat currency. While several banks in the United States—including Signature and Silvergate—have built their business strategy around working with crypto companies, the so-called Crypto Winter, in which the prices of major currencies have taken big hits, has brought more reluctance, as regulators crack down.
With Signature and Silvergate both facing financial difficulties, it is also unclear what other banking partners might be available to Binance.
Regulators have shown an unwillingness to approve crypto-focused banks, with policymakers stating that it is important to keep the risky sector segregated from traditional finance.
At the end of January, the Federal Reserve announced it would not approve membership for a digital assets bank, Custodia, which operates as a “special purpose depository institution” in Wyoming.
In an interview with Fortune, Custodia founder and CEO Caitlin Long said that it was important to have safe and sound financial options connecting the traditional finance system to the crypto ecosystem.
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