Binance, the world’s largest cryptocurrency exchange, said Tuesday it is halting withdrawals of the stablecoin USDC while it manages a “token swap.”
The move came amid a great concern from investors over Binance’s stability following the implosion of rival exchange FTX as well as a report of a potential criminal investigation from the U.S. government.
Binance said that it has “temporarily paused” USDC withdrawals while it does a “token swap.” This involves swapping one cryptocurrency for another without the need for fiat currency.
Changpeng Zhao, CEO of Binance, 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 the U.S. dollar.
Zhao said that any transfers into USDC from the stablecoin known as PAX, as well as Binance’s own token BUSD, require routing through a bank based in New York which is not yet open.
A token swap could be a way for Binance to get more USDC quickly while the banks are closed in order to resume withdrawals for customers. Zhao said users could still withdraw other stablecoins including BUSD and tether. Deposits are not affected, he said.
