Cryptocurrency exchange Binance is temporarily suspending USDC stablecoin withdrawals

Binance, the world’s largest cryptocurrency exchange, said on Tuesday that it will temporarily halt stablecoin withdrawals USDC During the Token Swap procedure.

The move comes as investor concerns grow about the stability of Binance following the collapse of rival exchange FTX as well as a report of a possible cryptocurrency exchange A criminal investigation from the US government.

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Binance said it has “paused” USDC withdrawals while it is doing “token swaps.” This involves exchanging one cryptocurrency for another without the need for fiat currency.

Binance CEO Changpeng Zhao tweeted on Tuesday that the exchange is seeing an increase in withdrawals of USDC, a cryptocurrency known as a stablecoin because it is pegged one-to-one with U.S. dollar.

Investors use USDC to trade in and out of different cryptocurrencies without the need to return funds to USD. If traders are withdrawing USDC from Binance, it may be to move it to another platform.

Zhao said that any transfers to USDC from the stablecoin known as PAX, as well as Binance’s BUSD token, would require routing through a New York-based bank that has yet to open. Zhao’s suggestion is that users look to convert PAX and BUSD into USDC in order to withdraw their funds from Binance.

Token swaps could be a way for Binance to get more USDC quickly while banks are closed in order to resume withdrawals for customers.

Zhao said that users can still withdraw other stablecoins including BUSD and Tether. He said that deposits are not affected.

The Binance token is called BNB Trading is down about 5% Tuesday morning, according to data from CoinGecko.

It is not usually a good idea for a crypto company to pause withdrawals. In the summer, crypto companies including the lender Celsius had to pause withdrawals before finally filing for bankruptcy. There is no indication of any such issue for Binance.

In the past 24 hours, Binance has seen $1.6 billion in outflows from its platform, according to a tweet from crypto data firm Nansen published early Tuesday. Nansen said that Binance has more than $60 billion in assets on its platform.

FTX’s breakdown The arrest of its former CEO, Sam Bankman Fried Cryptocurrency investors are on edge with fears of further contagion across the industry.

Binance has been in the spotlight since its release The decision to sell its stake in FTX’s self-issued digital FTT tokenspreceding the failure of the competing exchange.

Investors have called for more transparency in Binance’s business. Last month, the company released a reserve guide, claiming to have a reserve ratio of 101%. This means that it has enough assets to cover customer deposits.

But Critics He said that proof of reserves did not go far enough to provide assurances about Binance’s collateral. MazarsThe audit firm, which Binance used to prove the reserves, said in its five-page report that the company “does not express an opinion or confirmatory conclusion.”

Investors also keep tabs on who decides Reuters That US Department of Justice prosecutors are delaying the completion of a criminal investigation into Binance. Reuters, citing four people familiar with the matter, said the investigation focused on Binance’s compliance with anti-money laundering laws. Binance responded, saying, “Reuters got it wrong again.”

“We have no insight into the inner workings of the US Department of Justice, and it would not be appropriate for us to comment if we did,” the company said in a tweet on Monday.