Crypto exchange Binance halts withdrawals of major USDC stablecoin

livemint.com:

Digital-asset exchange Binance Holdings Ltd on Tuesday said it had "temporarily paused" withdrawals of the major stablecoin USDC. Taking to Twitter, Binance's chief executive Changpeng Zhao wrote, "On USDC, we have seen an increase in withdrawals."

The Binance CEO further said that swapping USDC Coin with two other crypto tokens – Paxos Standard and Binance USD – requires using traditional dollars at a bank in New York. "The banks are not open for another few hours. We expect the situation will be restored when the banks open," , Zhao tweeted.

He added, "The swaps are "1:1 conversions, no margin or leverage involved. We will also try to establish more fluid swap channels in the future. In the meantime, feel free to withdraw any other stable coin, BUSD, USDT, etc."

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 NY in USD. The banks are not open for another few hours. We expect the situation will be restored when the banks open. 1/2

In another tweet, Binance, the world's biggest crypto exchange, said the halt was due to "token swap" – where digital token holders exchange their crypto coins, typically over different blockchains.

Earlier in September, Binance said that it would automatically convert user balances and new deposits of USD Coin and other stablecoins Pax Dollar and True USD into its own stablecoin, Binance USD.

Recently, Binance witnessed a substantial boost in trading activity as Sam Bankman-Fried’s FTX crypto empire collapsed in November.

Trading activity on the largest cryptocurrency exchange jumped by 30% in November, when FTX had a liquidity crunch that eventually led to its bankruptcy and wrecked havoc on the crypto