Binance By trading volume, it is the largest cryptocurrency exchange on the globe.Fake images
Jakub Porzycki | Nurfoto | fake images
The world’s leading crypto exchange, Binance, declared on Tuesday that it will be halting withdrawals of USDC stablecoin while carrying out an asynchrony, known as a “token swap.”
The news has caused concern amongst investors who fear that the recent collapse of the rival exchange FTX and a report on a possible criminal investigation by the US government may be behind Binance’s move.
Binance has stated that USDC withdrawals have been “temporarily paused” while the token swap is taking place. This process allows users to trade one cryptocurrency for another without requiring the use of fiat currency.
Changpeng Zhao, CEO of Binance, tweeted on Tuesday that the exchange is experiencing an increase in USDC withdrawals. The stablecoin is also commonly referred to as USDC since it is pegged one-to-one with the American dollar.
Investors use USDC as a way to easily trade in and out of cryptocurrencies without having to convert back into US Dollars. If USDC is being withdrawn from Binance it could be used to transfer it to another platform.
Zhao said that USDC can be traded on other exchanges from the stablecoin PAX without having to route it through a bank, unlike Binance’s own BUSD token which requires a bank based in New York but is currently not open.
A token swap could be used as a means to get money out of Binance quickly, while banks are closed and unable to process withdrawals.
Zhao has also stated that users will still be able to withdraw other stablecoins, such as Tether and BUSD.