Binance, the world’s largest digital asset ecosystem, informed its users that is “temporarily” suspending US dollar withdrawals and deposits using bank accounts starting on Wednesday.
A Binance spokesperson noted that the service disruption will affect users of US dollar-held bank accounts, who allegedly represent “only 0.01% of our monthly active users leverage.” The development doesn’t impact the vast majority of Binance’s users, who already use their national currency on the P2P market and other exchange transactions. They also will continue to use other payment rails such as credit cards, Google Pay, Apple Pay, and SEPA in the EU.
“We are temporarily suspending USD bank transfers as of February 8th. Affected customers are being notified directly. In the interim, all other methods of buying and selling crypto remain unaffected, including bank transfer using one of the other fiat currencies supported by Binance (including euros), buying and selling crypto via credit card, debit card, Google Pay and Apple Pay and via our Binance P2P marketplace,” he added.
Binance said it will work to restart the service soon and further explained that it its US affiliate, Binance.US, is not affected by the suspension.
The move comes nearly two weeks after Signature Bank told Binance it will no longer be handling SWIFT transactions for its customers below $100,000. Citing a desire to decrease reliance on digital asset deposits, US banks have been pulling back on their exposure to the crypto industry. The New York State-chartered commercial bank is also the banking partner to many of other exchanges including OKX, Bitstamp, Bithumb, eToro, Huobi and Kraken
Binance has similar issues in Brazil when it cut ties with its existing payments partner, Capitual. Citing the new requirements imposed by the Central Bank of Brazil, Capitual said it had to discontinue its services to Binance as the exchange failed to comply with the new rules.
The Brazilian bank, which also provides payments services for other exchanges, said Kucoin and Huobi have adapted their systems to the changes. As such, they remain operational on the Capitual platform, and their customers can continue their transactions with reais regularly.
Binance was reportedly under investigation by the Justice Department, but a split between federal prosecutors is delaying filing criminal charges against the exchange and its CEO.
The original investigation dates back to 2018 when Binance was asked to voluntarily hand over messages from Zhao and 12 other executives and partners on matters including the exchange’s detection of illegal transactions and recruitment of U.S. customers.