Binance Pauses USDC Withdrawals to Conduct Token Swap Involving BUSD
Binance is conducting a token swap of BUSD to USDC due to a massive increase in withdrawals for the latter.
The largest cryptocurrency exchange Binance announced on Tuesday it has temporarily suspended withdrawals of Circle’s stablecoin, USD Coin (USDC). The exchange said the move is meant to enable them to facilitate a token swap involving its affiliated stablecoin, BUSD, amid an increase in withdrawal requests for USDC.
Binance Temporarily Halts USDC Withdrawals
Recall in September that Binance stopped supporting certain stablecoins, including USDC. All users’ USDC deposits to the exchange would be automatically converted to BUSD, in a ratio of 1:1. However, they are still provided with an option to withdraw the affected stablecoin via a process that requires the auto-converted BUSD to be swapped back.
While commenting on the development, CZ said the process of swapping from “PAX/BUSD to USDC” could tarry for hours because the funds need to go through “a bank in NY in USD,” and “banks are not open for another few hours.”
“These are 1:1 conversions, no margin or leverage involved. We will also try to establish more fluid swap channels in the future,” CZ added. “In the meantime, feel free to withdraw any other stablecoin, BUSD, USDT, etc.”
Are Funds SAFU?
Today’s development comes as Binance sees a massive increase in withdrawal requests for USDC, according to CZ. This is not entirely surprising considering the heightened level of desperation and anxiety among the users in light of the FUDs and speculations of liquidity pressure on the largest crypto exchange.
However, the comment from CZ is quite reassuring, and some people consider the line “feel free to withdraw any other stablecoin” to be affirmative. While the sheer state of Binance’s financial position remains uncertain, one reality remains that users can still withdraw USDT and BUSD from the exchange as of the time of writing.
~ By Ibiam Wayas ~
